Arcandra Tahar: Tesla Choose India Because The Cost Of Living In Bangalore Is Lower Than In Jakarta

Former Minister of Energy and Mineral Resources, Arcandra Tahar. (Photo: Doc. Antara)

JAKARTA - Recently, news has been widely heard that the electric-powered automotive manufacturer Tesla has expressed interest in establishing a factory in Indonesia as a production base in Asia. The news was sticking out along with Tesla's serious intention to want Indonesia to become the main supplier for electric car batteries.

However, Elon R. Musk's company finally decided on India as the destination country for the establishment of production facilities outside the United States.

Minister of Energy and Mineral Resources (ESDM) for the 2016-2019 period Arcandra Tahar gave his views on this matter. According to him, the country in the South Asia region has several advantages compared to Indonesia.

"Basically, we must first understand that in its home country the United States, Tesla built its manufacturing plant and technology center in Silicon Valley, which is the center of technology in the US. "Logically, the cities in the world that are closest to this requirement are Tel Aviv in Israel and Bangalore in India", he said via his official Instagram website @archandra.tahar on Wednesday, February 24.

So why did Elon Musk fall in love with India?

“Nobody knows the exact reason. But we suspect there are several reasons. First, by prioritizing Bangalore, Tesla not only gets the best IT ecosystem but also gets huge market access", he said.

He noted that India is one of the most 'greedy' countries in terms of consumption of motorized vehicles, especially four-wheeled types.

"India is the country with the fourth-largest number of car sales in the world after China, the US, and Japan", he said.

Meanwhile, the second reason according to him is the component of labor costs which are very supportive of manufacturing production activities.

“In India, the workforce is cheaper than Tel Aviv. The cost of living in Tel Aviv is 3 times higher than in Bangalore, as are employee salaries. In fact, the cost of living in Bangalore is lower than Jakarta", he said.

Another analysis presented by the energy sector professional was related to India's ability to build market networks, particularly in the technology and capital sectors.

"It is undeniable that both of them (India and Israel) have very strong networks. Many CEOs in the IT sector are of Indian descent and many owners of capital are of Israeli descent”, he explained.

Tesla factory. (Photo: Instagram @arcandra.tahar)

From this fact, Arcandra hopes that the government and all elements of the nation can take lessons so that they can continue to improve their abilities and capabilities so that they can compete at the global level.

"Tesla's decision to choose India can certainly be a lesson, that all countries are now competing to attract investors", he said.

"Indonesia has extraordinary natural resources and human resource potential that are not inferior in the world. But ensuring that these two strategic assets can form an ecosystem that provides attractiveness to investors is certainly a challenge that is not easy to build in an instant, God willing", Arcandra concluded.