JAKARTA: Negotiations between Indonesia and Tesla are continuing, a senior minister said on Thursday, following a report that the US electric vehicle maker is nearing a preliminary deal to build production facilities with a capacity of one million units in the country.
Luhut Pandjaitan, who has been leading the talks with Tesla, declined to discuss further details, citing a non-disclosure agreement.
Bloomberg News also reported that the Indonesia talks include plans for production facilities and a programme to facilitate the company’s supply chain, citing people familiar with the matter.
“I can’t comment, we’re still talking,” Luhut told Reuters, adding that he had just recently held another round of talks with Tesla.
Tesla did not respond to a request for comment.
Chief executive Elon Musk tweeted on Wednesday: “Please be cautious about writing articles citing ‘unnamed sources’, as they are frequently false,” in a comment on a tweet referencing the report.
Indonesia, the world’s fourth most populous country, has been aggressively wooing the US company to build facilities to produce EVs and batteries. President Joko Widodo met with Musk to discuss a potential deal last year.
Indonesia’s nickel ore can be processed for use in EV batteries and the country is keen to develop a downstream industry at home to take advantage of its rich nickel reserves, after banning ore exports since 2020.
Musk last month said Tesla was close to picking the location of its new “Gigafactory” following media reports that it could announce a new factory in the northern Mexican state of Nuevo Leon as soon as December.
Tesla currently makes its electric cars in Shanghai, Berlin, and Austin and Fremont in the United States.
Meanwhile, Indonesia has managed to attract other automakers to invest in EV production.
Hyundai Motor Co and SGMW Motor Indonesia — a joint venture of SAIC Motor Corp, General Motors and Wuling Motors Holdings — have built assembly facilities in the country.
Indonesian authorities have said the Japanese firms Toyota and Mitsubishi Motors have pledged investments in EV production.
Companies that have invested or expressed interest in investing in EV battery making include LG Energy Solution of South Korea, Contemporary Amperex Technology of China, Foxconn of Taiwan and BASF of Germany, Indonesia’s investment ministry said.
Jakarta plans to incentivise EV purchases to make them more affordable this year and encourage sales, government officials have said.
