Indonesian President personally met with Musk to invite Tesla to build a factory in Indonesia

Joko Widodo

Indonesia has reportedly offered Tesla a series of incentives, including tax breaks and concessions to mine nickel, and believes Tesla will eventually decide to build a factory in Indonesia, President Joko Widodo said yesterday.

As Southeast Asia's largest economy, Indonesia has been courting Tesla's investment since 2020 to produce batteries and electric cars in the country. Indonesia is rich in nickel ore reserves, and nickel is a key raw material for producing electric car batteries.

Joko has held two meetings with Musk to win Tesla's investment. Last year, Joko met with Musk in person at the SpaceX base in Texas. Later, the two had a phone call. Joko said today, "I said to Musk, if you invest in Indonesia, I will give you the concession to mine nickel."

In addition, Joko offered Musk a number of other incentives, including tax breaks and subsidies for electric car purchases, in hopes of creating a suitable market for Tesla's investment. Joko said government ministers are in the process of finalizing these subsidies.

To that end, Joko believes Indonesia has a greater advantage than the other countries Tesla is looking at. That's because Indonesia has the world's largest nickel reserves, as well as a huge domestic market. Joko also stressed that Indonesia is open to Tesla's investment in electric vehicle batteries and the electric vehicle supply chain. He said, "If Tesla wants to start with electric car batteries, that's fine."

In response, Tesla has not yet commented.

Currently, Tesla is looking for the location of the company's next manufacturing center. Currently, Tesla has four electric vehicle manufacturing plants located in Fremont, California; Shanghai, China; Austin, Texas; and Berlin, Germany.

Analysts expect that Tesla will need to build seven to eight more electric car manufacturing plants to achieve Musk's goal of selling 20 million electric cars per year by 2030.

In addition to Indonesia, South Korea, Canada and Mexico are also attracting Tesla to build factories. Mexico's presidential spokesman said Tuesday that Tesla is considering building an electric car assembly plant near the airport in New Mexico City.

Analysts believe that Mexico may have an advantage in winning Tesla's investment, because Mexico is close to the United States (Tesla's main market), with an established parts supply base. In addition, cars produced in Mexico are eligible for the Biden administration's consumer tax credit.

If Tesla invests in battery production in Indonesia, it will be its first battery factory in Asia. Last month, Tesla announced a $3.6 billion investment to expand battery production at its Nevada plant.

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John Murphy

John Murphy is the founder of TOPCARS Tesla Aftermarket Accessories, as well as an investor in Tesla and owner of the Model Y. He posts about Tesla news while running the site on a daily basis.

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