Tesla Gigafactory Indonesia a deal? Minister demanded the construction agreement

Indonesian media have reported that Tesla has agreed to build a battery and EV plant at an industrial complex in Central Java province, quoting Bahlil Lahadalia, the country’s investment minister and head of the Indonesian Investment Coordinating Board.

Negotiations have been going on for some time but it is learned that Tesla’s talks with Indonesia to build a factory in the islands were postponed to March 2022. Talks resumed sometime in April, turning into a meeting between Indonesian President Joko Widodo and Tesla. Elon Musk, CEO of SpaceX Facilities in Texas, where Musk said he would visit the country in November this year.

Tesla has not yet made an official announcement on Indonesian investment. Indonesian Minister Lahadalia also did not provide specific details, saying only that Tesla would enter Indonesia this year.

So far, Singapore is the only ASEAN country with Tesla’s official retail presence. There is no word on Malaysia’s retail presence, but there is an intention to explore, starting with supercharger sites, perhaps to support Singapore’s Tesla vehicles running on Malaysian roads.

There is a possibility of an Indonesian Tesla battery factory, even if an Indonesian Tesla car factory is not confirmed at the moment. Tesla wants a nickel supply, and Indonesia is rich in resources but has banned the export of raw nickel to encourage processing within the country. So if Tesla wants nickel, it can only get it if it uses it to make a final product inside Indonesia.

Of course, if a battery factory is already in Indonesia, it increases the chances of a regional car factory in the country as it will create a more tightly integrated supply chain.

Malaysia is also keen to persuade Tesla to set up a facility here, Prime Minister Ismail Sabri extended an official invitation earlier this month, but from a general point of view it certainly seems that Indonesia is a regional factory ahead in the game.

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