Tesla agrees to build battery and electric vehicle factory in Indonesia, official says

Tesla reportedly agreed to build a battery and electric vehicle factory in Indonesia, according to the country’s chief investment officer. The comment comes after Musk met with the Indonesian president.

Last week, we reported that Tesla is set to strike a deal for a battery business in Indonesia after another round of talks with representatives from the automaker and the Indonesian government; it was not the first time that talk of Tesla’s major investment in Indonesia had emerged.

In 2020, we reported that Tesla would be in talks with the Indonesian government to build a new nickel business in the country, which has a strong supply of nickel – nickel is one of the main materials used in the production of cathodes for battery cells used in electric vehicles. The move came after CEO Elon Musk pleaded with mining companies to increase their nickel production.

Later, we also learned that Tesla was actually in talks with Indonesia not only about nickel, but about possibly building a full battery factory in the country. After a break in talks, things picked up speed earlier this month after Tesla sent a group to Indonesia to talk with the government and Elon Musk met with President Joko “Jokowi” Widodo.

A week later, local news reports that Tesla has “agreed” to a deal to build a battery and electric vehicle factory in Indonesia:

Tesla has agreed to build a battery and electric vehicle factory at an industrial complex in the Central Java province, following talks in the United States last weekend between President Joko “Jokowi” Widodo and the chief of Tesla Elon Musk, Investment Minister Bahlil Lahadalia said on Wednesday.

Lahadalia clarified that nothing was “signed” yet, but he said it was agreed:

God willing, Tesla will enter Indonesia this year. But I can’t announce the month yet. Let’s wait, because we haven’t signed an agreement yet. How many investments are still kept secret, still pending. But it’s good, big.

He did not elaborate on the details of the plan, but a battery and electric vehicle factory was mentioned. Musk previously said Tesla aims to announce new factory locations by the end of the year.

Electrek’s Grasp

I’ll take it with a grain of salt for now. Sounds like a decent source, but better be careful until something gets signed off. This would be a big deal for Tesla, as it would likely come with them to secure a large supply of nickel.

Indonesia has introduced regulations that require companies to process nickel locally – so it’s not that difficult for them to manufacture complete battery cells locally – but the construction of fully electric vehicles in Indonesia is more surprising, but not impossible.

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