The Indonesian government is in informal, preliminary talks with electric vehicle maker Tesla about potential investments in the country, which is a major nickel producer, Reuters reported.
Indonesia aims to develop a complete home nickel supply chain. The country is focusing on extracting chemicals from batteries, making batteries, and ultimately making electric vehicles. That is why Indonesia has stopped exporting unprocessed nickel ore to support investment in the domestic industry.
Ayodhia Kalake, a senior official at the Coordinating Ministry for Maritime and Investment, said Tesla had informally contacted the government about a possible venture. However, he did not elaborate on any details and said further discussion with the California-based manufacturer is required.
"It was still an early discussion and was not detailed yet," Ayodhia said in a statement on Monday.
“We need further discussion with Tesla,” he said, adding that Indonesia has a number of incentives for investment in EVs.
During Tesla’s Q2 2020 Earnings Call, CEO Elon Musk said that Tesla would give a “giant contract” to companies that could mine nickel “efficiently and in an environmentally sensitive way.”
Analysts predict that Indonesia will account for nearly all of the growth in nickel shipments over the next decade. But a number of projects in the country are planning to dump mine waste containing metals such as iron into the sea.
“It could undermine the entire proposition of trying to sell a consumer a product that is environmentally friendly, if you have this back story,” said Steven Brown, a Jakarta-based consultant and former employee at nickel miner Vale.
However, working with Tesla could change the current situation and force nickel producers to change their behavior. For instance, an Indonesian nickel smelting project—being built by China’s Tsingshan Group and partners to produce battery-grade chemicals—withdrew a request to dispose of waste in the ocean, a government official said on Friday.
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Eva Fox joined Tesmanian in 2019 to cover breaking news as an automotive journalist. The main topics that she covers are clean energy and electric vehicles. As a journalist, Eva is specialized in Tesla and topics related to the work and development of the company.