Tesla's battery supplier, LG Energy Solution, a subsidiary of LG Chem, signed a memorandum of understanding (MOU) with the Indonesian government investment authority to invest $9.8 billion in electric vehicle batteries, the head of the Coordination Council on investment in Indonesia said on Wednesday.
The deal was signed on December 18, and includes investments in the electric vehicle supply chain, per Bahlil Lahadalia, the Chairman of Indonesia Investment Coordinating Board, Reuters reported. “We have signed an MOU for the construction of an integrated electric battery factory from upstream to downstream,” Lahadalia said.
“Mines, smelters, precursors, cathodes, cars to recycling facilities will be built in Indonesia,” he said. He also said that the project will be located in North Maluku and Central Java.
Lahadalia clarified that, under the Memorandum of Understanding, at least 70% of the nickel ore that will be used to make batteries for electric vehicles must be processed in Indonesia.
Following the closed MOU signing ceremony, a representative from LG Energy Solution confirmed the deal but was unable to provide details.
Indonesia intends to begin processing its reserves of nickel laterite ore for use in lithium batteries, making it a global hub for the production and export of electric vehicles, and 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, as they wish to support investment in this domestic industry. Therefore, battery manufacturers are now looking to develop their business in the country.
Tesmanian previously reported that the Indonesian Ministry of Maritime and Investment Coordination indicated on December 16 that Tesla's battery supplier, China's Contemporary Amperex Technology (CATL), is investing $5 billion in a lithium battery plant that will go into operation in four years in the country.
Also, the Indonesian government recently announced that Tesla will send a delegation to Indonesia to discuss possible further cooperation in the supply of nickel. The country's government has repeatedly spoken about negotiations with Tesla.
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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.