Elon Musk exploring deal with South Africa, to provide Starlink services in exchange for Tesla battery factory

Elon Musk, CEO of SpaceX and Tesla, is reportedly in discussions with South African President Cyril Ramaphosa over a potential agreement that could bring Starlink satellite internet services to the country.

The deal hinges on South Africa easing regulations that currently require foreign companies to be at least 30 per cent black-owned to operate legally. In return, Musk’s Tesla could establish a battery production facility in the nation, marking a significant investment in its energy and technology sectors.

The discussions come as Musk, who was born in South Africa, leverages his growing influence on the global stage. The proposed agreement offers a mutually beneficial exchange: regulatory flexibility for Starlink’s entry in exchange for local job creation and investment from Tesla.

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Regulatory challenges and potential workarounds

South Africa’s current laws mandate equity sharing with Black-owned local partners, a policy aimed at addressing historical inequalities. Musk has reportedly requested that these requirements be loosened or removed to allow SpaceX to operate Starlink legally in the country.

South African officials are exploring alternatives, such as requiring foreign companies to commit to local investment and job creation as a way to balance the policy’s objectives with Musk’s proposals. This approach could serve as a workaround that aligns with the country’s goals while enabling Starlink’s entry.

Starlink, known for delivering high-speed internet via satellite, has already established a presence in other African nations, including Nigeria, Ghana, and Botswana. Expanding to South Africa would solidify its footprint on the continent and enhance connectivity in underserved areas.

Ramaphosa’s vision for broader investments

For President Ramaphosa, the deal isn’t just about internet access — it’s also a chance to attract significant investment from Musk’s other ventures. Tesla’s involvement in battery production could boost South Africa’s renewable energy ambitions and create much-needed jobs.

Ramaphosa’s interest mirrors similar pitches made to Musk by other countries. Indonesia, for example, previously sought to pair Starlink services with Tesla’s electric vehicle battery production. While Musk ultimately turned down Indonesia’s proposal, citing logistical challenges, the country remains eager to collaborate on other projects with his companies.

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Musk’s global influence and strategic expansion

These negotiations highlight Musk’s growing role on the geopolitical stage. Following Donald Trump’s recent election victory, Musk has taken on an increasingly prominent role in governmental affairs, including chairing a US government spending audit committee. His companies, particularly SpaceX and Starlink, have also become central to global discussions on technology, defence, and connectivity.

Starlink’s rapid expansion — now operational in over 100 countries — has seen it play a pivotal role in conflict zones like Ukraine and Yemen, demonstrating its strategic importance. However, regulatory hurdles in new markets remain a consistent challenge.

If the South Africa deal comes to fruition, it could serve as a model for how governments and tech giants negotiate agreements that balance national policies with the need for global innovation. For Musk, it represents another opportunity to deepen his influence while expanding his technological empire.