Tesla Seeks New Battery Factory in Nickel-Rich Indonesia, Gov Talks Continue

by Smokey Shorts October 18, 2020

Tesla Seeks New Battery Factory in Nickel-Rich Indonesia, Gov Talks Continue

On October 5, Tesmanian reported that 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, according to ReutersDuring 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.”
 
And now, it is looking ever more likely that Tesla could build a battery factory in Indonesia, CNBC Indonesia reported Monday, October 19. "Tesla would later be directed to build a factory in Batang. Currently the discussion process between Tesla and the government is still ongoing," said Minister of Industry (Menperin) Agus Gumiwang.

It is clear from this exciting update that, not only does Tesla continue to actively explore a possible battery factory in Indonesia, the California-based manufacturer appears to have significant government support. Furthermore, Indonesia is incentivizing factory relocations into the integrated industrial area of Batang, Central Java, which include free 10-year land leases, CNBC Indonesia reports.

Coordinating Minister for Maritime Affairs and Investment, General TNI (Purn) Luhut Binsar Pandjaitan, spoke to a conversation reportedly had with Tesla in September. "Before I end my remarks... I just received a call from Tesla in America, they are also interested in building a lithium battery (factory) in Indonesia," said Luhut Wednesday, September 9.

Per Luhut, Tesla is attracted to Indonesia, as the country has some of the world's most robust nickel reserves. When Tesla inquired about the adequacy of the reserves, Luhut continued, explaining: "I said you put the investment here today we will give the reserves. So if we always change from commodity base to downstream. So, we see production downstream. That will turn Indonesia into a great country into the global supply chain."

As Tesmanian previously 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.

 
Given Tesla's aggressive growth plans, including its new, game-changing 4680 tabless cells, the company will absolutely need to secure as much battery material as possible. That is also why we learned on Battery Day that Tesla Is Getting Into The Lithium Mining Business. To transition the world to sustainable energy, we suspect Tesla will continue to seek out new prospects for additional battery and car manufacturing facilities. Indonesia would be a very smart next step.

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