Badung. Chief Investment Minister Luhut Binsar Pandjaitan sheds light on Tesla's decision to delay its investment in Indonesia and the potential collaboration between Indonesia's Eureka AI and xAI's Grok.

Indonesia, abundant in nickel resources, has been courting Tesla for years to invest in its electric vehicle (EV) industry, but no deal has been struck yet.

Sitting alongside Tesla's founder, Elon Musk, at the 10th World Water Forum in Nusa Dua, Bali, Luhut pointed to the oversupply of electric vehicles (EV) from China as a key factor influencing Musk's global investment strategy, including in Indonesia.

"Chinese EVs are flooding the market with competitive prices, undercutting Tesla's prices. Hence, Elon Musk is taking some time to assess investment opportunities worldwide," said Luhut on Monday.

The oversupply in the Chinese EV market has been exacerbated by the launch of new models by companies like Xiaomi and Nio. As sales declined, Tesla announced layoffs affecting over 10 percent of its global workforce in April, which numbered 140,473 employees by the end of 2023.

Additionally, Luhut said that Tesla's production in Mexico and Germany has been scaled back in response to prevailing global market conditions.

"As such, they are closely monitoring global market trends. Once conditions stabilize, they will determine their entry strategy," Luhut affirmed.

With Indonesia actively developing an electric vehicle ecosystem, encompassing nickel mining, battery production, and EV infrastructure development, Luhut believes it presents a prime opportunity for Elon Musk's investment in the EV sector.

Furthermore, Luhut hinted at Elon Musk's potential involvement in the board of Eureka AI, an artificial intelligence project in Indonesia, which is slated to collaborate with Grok AI.

"Eureka AI is poised to collaborate with Grok AI, and Elon Musk is open to joining Eureka's board," Luhut revealed.

Luhut also mentioned that Elon Musk was considering establishing a launch pad for SpaceX rockets in Indonesia.

While Elon Musk refrained from confirming his interest in investing in Indonesia's electric vehicle sector to the media, he disclosed that his immediate focus was launching Starlink in the country.

Elon Musk traveled to Indonesia’s resort island of Bali on Sunday to launch Starlink satellite internet service in the world’s largest archipelago nation.

Musk’s visit comes just weeks after Apple CEO Tim Cook met Jokowi on April 17 and said the company would “look at” manufacturing in Indonesia. Microsoft CEO Satya Nadella visited on April 30 and said the company would invest $1.7 billion over the next four years in new cloud and artificial intelligence infrastructure in Indonesia.