Earlier this month, it was reported that Tesla was close to a preliminary agreement to establish a production plant in Indonesia. Although there is no word yet, Indonesian President Joko Widodo still believes that Tesla will invest in production facilities in Indonesia. Republic, Reuters reports.
To get the U.S. electric carmaker in, Indonesia has been offering the company plenty of incentives, including nickel mining concessions. “I said to him, if you invest in Indonesia, I will give nickel concessions,” Jokowi said. Other incentives include tax breaks and an EV purchase subsidy program to create a market for Tesla in the country, he said.
Jokowi said his ministers were finalizing the subsidy and he “believes” that Indonesia has advantages over other countries Tesla might consider investing in because it has the largest nickel reserves and a large domestic market.
It was up to Tesla to accept the nickel mining proposal, Jokowi said, adding that, as a first step, the country was open to investment in EV batteries and EV supply chains. “If they want to start with EV battery production, that’s fine,” he said.
Since 2020, the country has been courting Tesla to invest in battery and car manufacturing. Preliminary talks about a “potential investment” came to light in October of that year, and the next month Jokowi said he would send a top team with top executives from the electric car maker.
In February 2021, Republic revealed that it had received an investment proposal from Tesla, focusing on electric vehicle battery manufacturing. However, plans to build a battery factory in Indonesia have not materialized. Still, Jokowi’s desire for Tesla to produce cars, not just batteries, in Indonesia has not waned, and Indonesia resumed talks with Tesla on electric vehicle and battery manufacturing in April last year.
The Indonesian president also got himself involved in the courting process, speaking with Elon Musk twice, first in person and later by phone during his visit to a SpaceX facility in Texas last year chatted.
Indonesia isn’t the only country in the game. The news agency’s report added that South Korea, Canada and Mexico are also vying for Tesla’s investment in manufacturing. Earlier this week, a spokesman for Mexico’s president said the company was considering building an assembly plant near Mexico City’s new airport.
Analysts said Mexico could have an advantage in winning Tesla’s investment because of its proximity to the U.S., the automaker’s main market, and the fact that cars made there are eligible for the Biden administration’s consumer tax credit. If Tesla were to invest in battery production in Indonesia, it would be its first such factory in Asia.