JAKARTA, Feb 1 (Reuters) – Indonesian President Joko Widodo is convinced that Tesla Inc (TSLA.O) China will finalize a deal to invest in a production facility in its home country that has offered the US carmaker incentives ranging from tax breaks to concessions for nickel mining.
Southeast Asia’s biggest economy is wooing Tesla to invest in battery and car manufacturing from 2020, seeking to take advantage of its rich reserves of nickel ore, which can be processed for use in EV batteries. Is.
The president, who is widely known as Jokowi, held talks with Tesla Chief Executive Elon Musk twice, meeting in person at the SpaceX facility in Texas last year to try and secure a deal. made a telephone call.
“I told them that if you invest in Indonesia, I will give you a nickel concession,” Jokowi said, referring to Indonesia’s offer of a mining concession.
Other incentives include tax breaks on EV purchases and a subsidy plan to create a market for Tesla in the world’s fourth-most populous country, he said, adding that his ministers were finalizing subsidies.
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The president said he was “convinced” that Indonesia has an edge over other countries Tesla could consider for investment because it has the largest nickel reserves and a large domestic market.
Jokowi said it was up to Tesla to offer the nickel, underlining that Indonesia is open to investment in the EV battery and electric car supply chain.
“If they want to start with EV batteries, fine,” he said.
Tesla did not immediately respond to a request for comment.
Tesla is looking for an additional manufacturing hub. The company currently manufactures EVs at four locations: Fremont, California; Shanghai; Austin, Texas and out of Berlin. Analysts estimate Tesla will need to build seven or eight more “gigafactories” to meet Musk’s goal of selling 20 million electric vehicles by 2030.
Besides Indonesia, South Korea, Canada and Mexico are vying to invest in manufacturing for Tesla. A spokesman for Mexico’s president said Tuesday that Tesla is considering setting up an assembly plant near the New Mexico City airport.
Analysts have said Mexico has the edge to win the Tesla investment because of its proximity to its main market in the United States, an established supply base for components and because vehicles manufactured there may qualify for Biden administration consumer tax credits. Can
Possible first for Asia
If Tesla invests in battery production in Indonesia, it would be the first such facility in Asia. Last month, the company announced a $3.6 billion investment to expand battery production at its Nevada factory.
Jokowi banned nickel ore exports in 2020 to encourage investors to build a vertically integrated supply chain using the metal as a raw material for batteries and EVs.
The ban has brought huge investment in nickel smelting, mostly from China, but has also been challenged at the World Trade Organization by the European Union, which says the ban was unfairly harming the stainless steel industry.
The World Trade Organization ruled in favor of the EU last year but Indonesia is appealing.
Indonesia has also seen interest in investing in EV or battery production, along with South Korea’s Hyundai Motor Co. (005380.ks) and LG Energy Solutions (373220.ks) Already building EV and battery plants.
Indonesian officials said last year that Tesla had signed contracts worth about $5 billion to buy material for its batteries from nickel processing companies.
Reporting by Gayatri Suroyo, Kate Lamb and Anand Teresia; Editing by Clarence Fernandez, Robert Birsel
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