Tesla ‘Agreed’ to Build a Battery and EV Plant in Indonesia, Says Government

Tesla has “agreed” to install production capacity for electric vehicles (EVs) and the batteries they run on in Indonesia, the country’s head of investments, Bahlil Lahadalia, recently said, reports Benar News (via Electrek).

The news comes a week after Tesla CEO Elon Musk met with Indonesian President Joko “Jokowi” Widodo in Texas to reportedly discuss a potential investment in Indonesia.

Indonesia, which has the world’s largest nickel reserves, has been trying to court Tesla’s investment for years now to become a global leader in EV batteries. Nickel is a key raw material used in the production of cathodes for battery cells.

The meeting between Musk and President Widodo was preceded by a round of preliminary discussions surrounding potential partnerships, as well as a Tesla delegation’s visit to Indonesia to discuss a battery-related investment earlier this month.

Musk also met with Indonesia’s Minister for Investment, Luhut Binsar Pandjaitan, in April at the Tesla Gigafactory in Austin to talk about a possible nickel supply deal for the EV maker.

The country has previously said it is not interested in solely supplying nickel, though. Instead, Jokowi seeks to establish a nickel-based EV industry in Indonesia that would cover everything from the mining and processing of nickel into nickel metal, to the production of battery components and the assembly of EVs.

Local news outlets in Indonesia are now reporting that Tesla has “agreed” to a deal with the Indonesian government.

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

While an agreement hasn’t been “signed” as of yet, Lahadalia said the two parties have reached an understanding.

“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,” said Indonesia’s head of investments. “How much investment is still being kept secret, still waiting. But this is good stuff, big stuff.”

While details on the deal are scarce right now, plans to produce both EV batteries and fully assembled EVs in Indonesia have been mentioned. Tesla is expected to announce planned locations for new factories later this year.