American electric automaker Tesla continues to negotiate with the Indonesian Government for a potential investment in the nickel-rich country’s electric vehicle industry, President Joko Widodo said in an interview with Bloomberg’s Latitude segment.
However, the Indonesian President omitted to share more information regarding the ongoing discussions. Yet, he stated that the Musk-led company may invest in Indonesia when the economic conditions ease.
Previous reports
EV-a2z reported in early September that Indonesia had no expectations for Tesla’s investment in the country’s EV industry, particularly a vehicle factory.
Senior Minister Luhut Pandjaitan even hinted that the EV giant was “suspending” all kinds of investments in any country after meeting with Tesla Chief Elon Musk in mid-August.
“[Tesla] turns out to be currently suspending investment in any country. There are two things that cause it, namely, overproduction and the current unfavorable global economic conditions.”
Senior Minister Luhut Pandjaitan (Translated in English)
Despite the investment suspensions, the Indonesian President continues to court Tesla to consider the country for future investment.
Reuters previously reported that CEO Musk plans to build a lithium battery materials factory in Indonesia, with the Senior Minister saying that the “investment will be quite big.”
“He wants to invest in the manufacturing of materials for lithium batteries.”
Senior Minister Luhut Pandjaitan
Advantages
Tesla’s potential investment in a new battery materials plant would be strategic, considering Indonesia’s enormous nickel reserves.
In fact, Indonesia has the world’s biggest nickel deposits at 21 million tonnes. It can potentially enable Tesla to access this huge supply of critical minerals needed for EV battery production.
In effect, Tesla can guarantee that it can power all the electric vehicles it aims to produce.
Disadvantages
According to the Hindustan Times, one of the major barriers to attracting Tesla’s investment in Indonesia is the lack of the necessary charging infrastructure. Moreover, Indonesia’s electric vehicle industry has just started to emerge.
That said, Indonesia may not be the best option for electric automakers like Tesla, which aims for large-scale production.
However, this situation may change once Tesla pursues a major investment in the country, considering the brand’s strong reputation in the EV space.
Tesla recently clarified that it currently has no plans to erect new factories in foreign countries due to the ongoing economic conditions. Chief Musk even disclosed during the last quarter’s earnings call that it will delay expansion in Giga Mexico over waning demand.
