Indonesia Could Have Tesla's Next Gigafactory, Though No Official Announcement Yet

Tesla's next target seems to be Indonesia: the Southeast Asian country has all eyes focused on it after statements by Elon Musk and the country's president, Joko Widodo. After a brief meeting held a few days ago in Texas, both parties may have apparently agreed to build a new Gigafactory in Indonesia: an electric vehicle production plant that would be supported by a large battery production facility. Let's remember a key fact, that Indonesia is one of the main players in the world of mining for the manufacture of batteries for electric cars.

The fact is that Indonesia currently has the largest nickel deposits in the world. The island country (actually, more than 1,200 islands all in all) has become the largest producer of nickel, and for this reason, in the eyes of (EV) companies and investors, it is extremely well positioned for the future. With the intention of underpinning this recognition, the high representatives of Indonesia know the importance of having the presence in their country of the biggest player in the electric car market, Tesla. After several contacts and discussions, the positions of the parties seem to be aligned, which could most probably cause an official announcement shortly.

As reported by Benar News, the meeting between Elon Musk and President Widodo held a few days ago was most fruitful. The president of Indonesia already takes the deal for granted, although there is still no official confirmation from Tesla, so there is no 100% guarantee yet. However, Elon Musk did have a certain charm about the president and the country, assuring that he was delighted by the enthusiasm of Indonesia and that they were analyzing a possible collaboration on “many, many fronts”.

That has been more than enough for a whole wave of rumors that have been unleashed so far. The most promising plans point to the construction of a new Gigafactory in the province of Central Java. The production center would also have its own facility for the production of batteries with which Tesla would take advantage of the proximity to the precious nickel resources. Again, there is no official confirmation at the moment, although the circle close to President Widodo is very positive about it.

Indonesia has clearly become more attractive to investors and manufacturers in recent years. The country wants 20% of its car fleet to be electric by 2025, something that – we need to point out - does not seem very real, considering that the vast majority of cars circulating in the country are old diesel and gasoline vehicles. Despite this fact, companies like Hyundai or LG Energy Solution already have plans to establish facilities in the country. The Koreans have started producing the Ioniq 5, and the Chinese are planning large investments for production.

On May 19, the Indonesian government confirmed a deal with the US-based electric vehicle maker, revealing few details. Earlier, the company had set off rumours of nixing its India plans over tax issues after CEO Elon Musk met the Indonesian President.https://t.co/9RgEz0taGJ— scroll.in (@scroll_in) May 26, 2022

The possibility of Tesla entering Indonesia is nothing new: a few days ago the news was that Tesla could open its own nickel extraction and processing facilities in the country. All this coincides with India's rejection of Tesla's arrival in that country, which we discussed in an article here a while ago. An agreement that finally did not come to fruition since India authorities refused to accept Tesla's proposal for the reduction of taxes - with the condition of opening a center in the country -. Despite everything, the establishment of a Tesla Giga Factory no doubt has great appeal for many countries, and the fact is that if a country does not accept, there will surely be another country that will see it in a positive way.

All images courtesy of Tesla Inc.

Nico Caballero is the VP of Finance of Cogency Power, specializing in solar energy. He also holds a Diploma in Electric Cars from Delft University of Technology in the Netherlands, and enjoys doing research about Tesla and EV batteries. He can be reached at @NicoTorqueNews on Twitter. Nico covers Tesla and electric vehicle latest happenings at Torque News.