Tesla has made an investment proposal to Indonesia that focuses not on a simple desire to purchase raw materials, but on batteries and energy storage solutions, the country's government said.
Indonesia received an investment proposal from Tesla, the country’s deputy head for investment and mining coordination, Septian Hario Seto, told reporters on February 5, Reuters reported. “I received their proposal yesterday morning...next week we will meet them (virtually) to get an official explanation,” Septian said.
The politician said he could not provide the details that were described in the proposal. However, he gave several details that partially clarify Tesla's intentions. According to the proposal, the discussions are around the central component for the company's cars: batteries. Septian said that, in addition to this, the proposal also covers energy storage solutions, i.e. Megapack, Powerpack and Powerwall, which Tesla manufactures at its US plant.
Indonesia made it clear that it is only interested in serious and fruitful cooperation with the manufacturer, which goes beyond the mere sale of raw materials, as the country seeks to switch from sales to processing. “If they only want to buy raw materials, we are not interested. This [proposal] is beyond just taking the raw material,” Septian added.
Indonesia is the world's largest nickel producer. After a change in the country's policy regarding the export of valuable material, several battery companies began looking for opportunities to locate production here. Indonesia is looking to develop a complete nickel supply chain--starting with mining and then refining into metals and chemicals used in batteries--to meet the demand for electric vehicles.
Indonesia is incentivizing factory relocations into the integrated industrial area of Batang, Central Java, which includes free 10-year land leases. "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," said Coordinating Minister for Maritime Affairs and Investment, General TNI (Purn) Luhut Binsar Pandjaitan in October 2020.
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