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President Widodo and Elon Musk meet in Texas. Image courtesy of Indonesian Presidential Press Office.


Tesla Contemplates New Factory In Indonesia

The next Tesla factory may be in Indonesia.

Recently, Tesla and India were unable to reach agreement on tariffs that would allow Tesla to sell its cars in that country. Tesla seems uninterested in building a factory in India under the circumstances and requirements put forth by the Indian government, but India is opposed to Tesla building cars in China and importing them into India. However, what if those cars weren’t built in China? What if they were built in Indonesia instead?

According to electrive, Indonesia president Joko Widodo recently met with Elon Musk at the SpaceX facility in Boca Chica, Texas, and the two got on famously. They discussed investments, technology, and innovation, and when it was over, Widodo instructed his minister for investments to follow up on the discussion he had with Musk.

Lahadalia says he is confident that Tesla will make investments in the country. In a report published this week, the Jakarta Globe says Elon Musk has agreed to build a plant in the industrial complex in Central Java province, with work beginning this year. No further details are available amount the new factory or how much it might cost.

“The team is negotiating, but rest assured that the president has a special move to woo Elon Musk,” Lahadalia said. “We are discussing how much the investment is worth and when to start. We just have to wait for the right time.”

Nickel & Batteries

About a quarter of the world’s nickel deposits are located in Indonesia, which makes it a prime location to manufacture batteries. Lots of batteries makes it an excellent place to manufacture electric cars. A consortium of Korean companies led by LG has signed an agreement with Indonesian state-owned companies for a battery factories worth around $9 billion. The project reportedly aims to build a complete value chain for electric vehicle batteries.

A similar partnership had already been concluded by the Chinese battery cell manufacturer CATL, which will invest nearly $6 billion in Indonesia. That project focuses on nickel mining and processing, battery materials, battery production, and battery recycling.

Last September, Hyundai Motor Group and LG Energy Solution began construction of a battery cell factory in Indonesia with an annual capacity of 10 GWh. That factory is expected to start operations in the first half of 2024. You can bet if Tesla decides to build a factory in Indonesia, it will be cranking out electric cars long before that.

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