Tesla Gigafactory Indonesia done? Minister claims agreement to build factory in Central Java

There are reports in Indonesian media claiming that Tesla has agreed to build a battery and electric vehicle factory in an industrial complex in Central Java province, citing Bahlil Lahadalia, the country’s investment minister and head of Indonesia’s investment coordination committee.

Talks have been going on for some time, but it was reported that Indonesia’s talks with Tesla to build a factory on the archipelago had collapsed back in March 2022. Talks resumed sometime in April, culminating in a meeting between Indonesian President Joko Widodo and Tesla CEO Elon Musk at SpaceX’s facility in Texas, where Musk said he will visit the country in November this year.

So far, there has been no official announcement from Tesla about an Indonesian investment. Indonesian Minister Lahadalia also gave no details, saying only that Tesla would enter Indonesia this year.

So far, the only ASEAN country with an official Tesla retail presence is Singapore. No word on a Malaysian retail presence, but intentions are to explore starting with Supercharger locations, presumably to support Singaporean Tesla vehicles cruising Malaysian roads.

An Indonesian Tesla battery factory is likely, although an Indonesian Tesla car factory is currently uncertain. Tesla wants a nickel supply, and Indonesia is rich in the resource but has banned the export of crude nickel to encourage processing in the country. So if Tesla wants the nickel, it can only have it if it uses it to make an end product in Indonesia.

Of course, if there is already a battery factory in Indonesia, it also increases the likelihood of a regional car factory in the country, as it would result in a more integrated supply chain.

Malaysia is also keen to woo Tesla to set up a facility here, with Prime Minister Ismail Sabri extending an official invitation earlier this month, but from a layman’s perspective it certainly looks like Indonesia is ahead of the game, when it comes to being the location for a regional manufacture.

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