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Indonesia Confirms Tesla Talks as Gigafactory Plan Rumoured

Jakarta has long courted the US auto company over setting up a production hub to build electric vehicle batteries and cars

Tesla vehicles come out of its factory in Shanghai
Tesla vehicles roll out of its factory in Shanghai. File photo: Tesla


Indonesia has confirmed negotiations are taking place with US EV giant Tesla amid rumoured plans to build production facilities with a capacity of one million units in the Southeast Asian country.

Senior government minister Luhut Pandjaitan, who has been leading the talks with Tesla, declined to disclose further details, citing a non-disclosure agreement.

“I can’t comment, we’re still talking,” Luhut said, adding that he had just recently held another round of talks with Tesla.

Tesla did not respond to a request for comment.


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Indonesia, the world’s fourth most populous country, has long courted the US company to build facilities to produce electric vehicle (EV) batteries and electric cars. President Joko Widodo met with Tesla chief Elon Musk to discuss a potential deal last year.

Indonesia’s nickel ore can be processed for use in EV batteries and the country is keen to develop a downstream industry at home leveraging its rich nickel reserves, after banning ore exports since 2020.

Musk last month said Tesla was close to picking the location of its new “Gigafactory” following media reports that it could announce a new factory in the northern Mexican state of Nuevo Leon as soon as December.

Tesla currently makes its electric cars in China’s Shanghai, Germany’s Berlin, and Austin and Fremont in the United States.


Indonesia EV Purchases Push

Meanwhile, Indonesia has managed to attract other automakers to invest in EV production.

Hyundai Motor and SGMW Motor Indonesia, part of a joint venture of SAIC Motor Corp, General Motors and Wuling Motors Holdings have built assembly facilities in the Southeast Asian country.

Indonesian authorities have said Japanese firms Toyota Motor and Mitsubishi Motors have pledged investments in EV production.

Companies that have invested or expressed interest in investing in EV battery making include South Korean’s LG Energy Solution, China’s Contemporary Amperex Technology, Taiwan’s Foxconn and Germany’s BASF, Indonesia’s investment ministry said.

Jakarta plans to incentivise EV purchases to make them more affordable this year and encourage sales, government officials have said.


  • Reuters with additional editing by Sean O’Meara


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Sean O'Meara

Sean O'Meara is an Editor at Asia Financial. He has been a newspaper man for more than 30 years, working at local, regional and national titles in the UK as a writer, sub-editor, page designer and print editor. A football, cricket and rugby fan, he has a particular interest in sports finance.


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