Tesla to invest in battery materials production in Indonesia, announcement in coming months: minister

Tesla plans to invest in the manufacture of materials for electric vehicle batteries in Indonesia, and the American electric vehicle maker is expected to make an announcement in the coming months, according to a Reuters report.

Indonesian coordinating minister of maritime and investment affairs, Luhut Pandjaitan said in an Instagram post that he led an Indonesian delegation that held a meeting with Tesla CEO Elon Musk in a recent trip to San Francisco, when Musk told the minister about the investment plan.

“He wants to invest in the manufacturing of materials for lithium batteries. The investment will be quite big. Let’s wait for Elon to come [to Indonesia] around the end of September or October this year,” the Indonesian senior minister said.

Last week, Indonesia announced that it would give automakers a further two years to qualify for EV incentives, following investment commitments by Neta and Mitsubishi, a separate Reuters report wrote.

The relaxed investment rules state that automakers need to commit to producing at least 40% of their EV content in Indonesia by 2026, or two years later than the initial target. The 40% content threshold had been set to encourage local battery production, according to the report.

Indonesia has been courting Tesla to invest in the country since 2020, where initial talks of a potential investment surfaced in October that year. The republic revealed in February 2021 that it received a proposal from Tesla with a focus on EV battery manufacture, though plans for a battery factory in the country did not materialise.

More recently in February this year, Indonesian president Joko Widodo expressed confidence that Tesla would still invest in Indonesia, following reports prior in that month that the EV maker was close to a preliminary deal for the setting up of a production plant in the country.

With the official Malaysian launch of the Tesla Model Y last month came the EV maker’s formal announcement of its expansion plans into the Malaysian market, with core elements being the setting up of an office and Tesla Experience and service centres as well as the setting up of a Supercharger network, as outlined in the ministry of investment, trade and industry’s (MITi) BEV Global Leaders programme.

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