Photo: Office of the President ROK, TED via YouTube | composition
Tesla is eyeing its next gigafactory in South-East Asia, with South Korea in a privileged position. Elon Musk profited from the visit of South Korean President Yoon Suk Yeol to the US and asked for a meeting to discuss further plans. According to the South Korean media, President Yoon promised "active support" with workforce and taxes should Tesla decide to invest in South Korea.
Despite starting construction plans for Giga Mexico, Tesla continues to scout other locations for future gigafactories. Previous rumors indicated that Tesla was looking for places in Asia and North America, based on the countries that courted Elon Musk: Canada, Mexico, Indonesia, India, and South Korea.
Mexico won the bid for a North American gigafactory, but the fight is still ongoing in Asia. India lost it because of its unwillingness to lower import tariffs for Tesla cars. Indonesia and South Korea have advantages and disadvantages, so seeing what Tesla and Elon Musk would choose will be interesting. In the latest development to the Asian gigafactory saga, Elon Musk asked for and was granted a meeting with South Korean President Yoon Suk Yeol to discuss future business plans.
The talks touched on the subject of a Korean Tesla gigafactory, but also the future cooperation of Korean companies with SpaceX. According to Korean media, President Yoon offered "active support in terms of location, workforce, and taxes." The biggest disadvantages South Korea has for a possible gigafactory are the strongly unionized workforce and labor costs, among the highest in the region. The proposition shows that the Korean government is highly interested in hosting a Tesla production facility.
On the other hand, the meeting was scheduled at Musk's request, indicating that the Tesla CEO is also interested in South Korea. Speculations abound, although analysts think a Korean gigafactory doesn't make much sense now. It would compete with Giga Shanghai for regional exports with a less favorable cost structure. The Korean EV market is not big enough to absorb the cars produced there. However, China is a sensitive matter, and Tesla might want a backup solution if China becomes more isolated.
The possibility of a battery gigafactory in Korea is also slim, considering that Tesla wants its supply chain as close as possible to the car production sites. Korea lacks the raw materials, so Tesla would have to import, process, and re-export them for use in its gigafactories. There's not much economic sense in doing that. Then why did Musk request a meeting with the South Korean president?
The SpaceX part might offer a clue. According to The Korea Herald, "Yoon voiced hope for greater cooperation between South Korean businesses and SpaceX to help foster South Korea's space industry." SpaceX still faces hurdles in South Korea, with Starlink blocked by various regulations. Musk is undoubtedly interested in deregulating satellite internet and other domains where his companies are active. That's why South Korea asked for SpaceX support for local companies in return, and the Tesla gigafactory could be just a bargaining chip.
Mexico won the bid for a North American gigafactory, but the fight is still ongoing in Asia. India lost it because of its unwillingness to lower import tariffs for Tesla cars. Indonesia and South Korea have advantages and disadvantages, so seeing what Tesla and Elon Musk would choose will be interesting. In the latest development to the Asian gigafactory saga, Elon Musk asked for and was granted a meeting with South Korean President Yoon Suk Yeol to discuss future business plans.
The talks touched on the subject of a Korean Tesla gigafactory, but also the future cooperation of Korean companies with SpaceX. According to Korean media, President Yoon offered "active support in terms of location, workforce, and taxes." The biggest disadvantages South Korea has for a possible gigafactory are the strongly unionized workforce and labor costs, among the highest in the region. The proposition shows that the Korean government is highly interested in hosting a Tesla production facility.
On the other hand, the meeting was scheduled at Musk's request, indicating that the Tesla CEO is also interested in South Korea. Speculations abound, although analysts think a Korean gigafactory doesn't make much sense now. It would compete with Giga Shanghai for regional exports with a less favorable cost structure. The Korean EV market is not big enough to absorb the cars produced there. However, China is a sensitive matter, and Tesla might want a backup solution if China becomes more isolated.
The possibility of a battery gigafactory in Korea is also slim, considering that Tesla wants its supply chain as close as possible to the car production sites. Korea lacks the raw materials, so Tesla would have to import, process, and re-export them for use in its gigafactories. There's not much economic sense in doing that. Then why did Musk request a meeting with the South Korean president?
The SpaceX part might offer a clue. According to The Korea Herald, "Yoon voiced hope for greater cooperation between South Korean businesses and SpaceX to help foster South Korea's space industry." SpaceX still faces hurdles in South Korea, with Starlink blocked by various regulations. Musk is undoubtedly interested in deregulating satellite internet and other domains where his companies are active. That's why South Korea asked for SpaceX support for local companies in return, and the Tesla gigafactory could be just a bargaining chip.
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