Tesla Plans to Invest in a New Battery Factory in Indonesia

Sep 2023

In August 2023, a high-ranking Indonesian official revealed that Tesla, the American electric vehicle (EV) maker, intends to invest in battery material production within Indonesia. Luhut Binsar Pandjaitan, the Coordinating Minister of Maritime and Investment Affairs, revealed that he had a meeting with Tesla CEO Elon Musk during a recent visit to San Francisco, during which Musk shared his plans to invest in the country.

Luhut revealed that there are plans to invest in the production of lithium battery materials, with the investment expected to be substantial. Reuters also reported that Musk might be visiting Indonesia in October 2023.

Health Minister Budi Gunadi Sadikin, who also took part in the meeting, subsequently disclosed a potential partnership between Indonesia and Elon Musk’s SpaceX subsidiary, Starlink. This collaboration aims to offer internet connectivity to schools and healthcare facilities in remote areas of eastern Indonesia.

Indonesia has long pursued Tesla for battery and EV manufacturing investments, leveraging Indonesia’s nickel resources. To foster domestic battery and EV production, nickel ore exports were banned in 2020. Additionally, an EV subsidy program was introduced to stimulate the electric car market and entice foreign investments, including from Tesla.

The current government aims to transform Indonesia into Tesla’s Asian manufacturing center, creating an integrated supply chain for vital EV components. In August last 2023, it was reported that Tesla had committed to buying USD 5 billion worth of Indonesian nickel, a claim that Tesla has not officially confirmed.

(Source: The Diplomat)


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