U. S. electric car maker Tesla has agreed to invest in battery and electric car manufacturing in Indonesia, the country’s investment minister said on Thursday without elaborating but hinting that the task could begin this year.
Jakarta has been looking to court Tesla for a few years as it seeks to take advantage of the fact that it is the world’s largest maker of nickel, a major component of electric vehicle (EV) batteries. Jakarta has also set a target that by 2025, 20% of cars made in Indonesia will be electric vehicles.
Tesla has agreed to build a battery and vehicle factory in a shopping complex in the central province of Java, following talks in the United States last weekend between Chairman Joko “Jokowi” Widodo and Tesla leader Elon Musk, Investment Minister Bahlil Lahadalia said on Wednesday.
“God willing, Tesla will enter Indonesia this year,” Bahlil said in a discussion in Jakarta.
“But I still can’t announce the month. Let’s wait, because we haven’t signed an agreement yet. How many investments are still kept secret, are still pending. But those are smart things, wonderful things,” he said.
On Thursday, BenarNews reached tesla’s Austin, Texas, headquarters by email and phone, but did not immediately respond or get a response.
On its way back to Jakarta from the U. S. -China summit. Jokowi met with Musk at the Launch of SpaceX in Texas on Saturday, after which the president said he talked about “technology and innovation” with the businessman who is the richest user in the world. world.
Musk, for his part, said he was “excited” by Indonesia’s enthusiasm.
“We’re going to look a lot at Tesla and SpaceX to try to make partnerships in Indonesia,” he said in a video that circulated online after the meeting.
“And, as I said, I think Indonesia’s long term is very promising. I think we had a strong prospective collaboration on many fronts,” the billionaire added.
A statement issued over the weekend via Jokowi’s workplace said Musk plans to make a stopover in Indonesia in November, the same month the Southeast Asian country will host the G-20 summit.
The world’s nickel producer
Meanwhile, some analysts welcomed the news of Tesla’s entry, but questioned whether Musk is serious about making an investment in Indonesia or whether the Southeast Asian country has what it takes to host a “Gigafactory. “A Gigafactory is the way trade refers to Tesla’s production plants. .
Indonesia produces 1 million cars a year that normally run on fuel tanks, but is looking to expand its electric vehicle market.
South Korea’s Hyundai recently unveiled its first vehicle manufactured at its Indonesian plant, the Ionic 5. Meanwhile, China’s Wuling Motors is expected to launch small cars from its Indonesia plant later this year.
Tauhid Ahmad, a researcher at the Institute of Development Economics and Finance, said Tesla will most likely not compete with Chinese and South Korean automakers in Indonesia in terms of price.
“I think if it wants to be a market player in Indonesia, Tesla has to be ambitious and reduce its prices. But is it possible?” Tauhid told BenarNews.
Last year, Hyundai and LG Energy Solution broke ground on a $1. 1 billion electric vehicle battery plant near the Indonesian capital.
The plant is being built through a consortium of South Korean corporations Hyundai Motor Co. , KIA Corp. , Hyundai Mobile and LG Energy Solution in cooperation with PT Industri Battery Indonesia, a joint venture of state-owned energy and mining corporations.
The Hyundai-LG Energy Solution plant is part of a $9. 8 billion (Rs 139. 5 trillion) electric vehicle battery deal between Indonesia and South Korea signed in Seoul in 2020.
Once completed, it will be able to produce battery cells to power 150,000 electric cars a year. Battery production is expected to begin next year.
While the government’s announcement is “good news,” the main points of the deal and the benefits for Indonesia of an investment in Tesla, adding jobs and generation transfers, needed to be clarified, said Ninasapti Triaswati, an economist at the University of Indonesia.
“What the Indonesian government wants to prepare is what kind of incentive is given to Tesla,” whether it’s tax breaks or import duty reductions, Ninasapti told BenarNews.
“We have to wait for Tesla to sign a cooperation contract,” he said.
Yayan Satyakti, an economist at Padjajaran University, said Tesla’s main considerations for making an investment in Indonesia may simply be a lower import fee than its Indian competitor and a more favorable trading ecosystem, being the world’s largest nickel producer.
But he asked if Indonesia had the infrastructure to house a Tesla factory, adding electric power and ports, plus labor.
“Tesla has a wonderful prospect of expansion as other people turn to non-fossil fuel-based transportation to fight global warming,” Yayan told BenarNews.
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