Indonesia says Tesla is going to announce a battery material factory, but take it with a grain of salt

Indonesian officials are saying that Tesla is going to announce a new battery material factory in the country, but take it with a grain of salt.

Senior Minister Luhut Pandjaitan met with Tesla CEO Elon Musk in San Francisco and shared on Instagram that the goal of the meeting was to understand what is the hold up with Tesla investing in Indonesia.

Luhut said that Musk confirmed that Tesla wants to build a battery material factory, and he hinted at an announcement in the coming months (via Reuters):

He wants to invest in the manufacturing of materials for lithium batteries. The investment will be quite big. Let’s wait for Elon to come here around the end of September or October this year.

Here’s the Instagram post:

However, the comment should be taken with a grain of salt because similar comments have been made by Indonesian officials in the past about Tesla investing in the country, and these plans have yet to materialize.

In 2020, we reported on Tesla allegedly being in talks with the Indonesian government to build a new nickel venture in the country, which has a strong nickel reserve – nickel is one of the main materials used in the production of cathodes for battery cells used in electric vehicles. The move came after CEO Elon Musk pleaded with mining companies to increase their nickel production.

As we detailed in our previous report on Tesla’s interest in Indonesia, the country is one of the world’s biggest nickel producers, but it has also recently put a ban on exporting nickel ore in order to encourage the industry to process it locally.

Indonesia hopes the measure will encourage companies to invest in manufacturing finished products in the country using their nickel, like batteries.

There has certainly been some interest from Tesla to establish a relationship with Indonesia.

In 2022, Tesla sent a group to Indonesia to talk with the government, and Elon Musk met with President Joko “Jokowi” Widodo.

However, the automaker’s actual intentions in the country have not been clear, and rumors have been all over the place.

In May 2022, Investment Minister Bahlil Lahadalia said that Tesla had “agreed” to “build a battery and electric vehicle plant.” At the time, we noted that the comment should be taken with a grain of salt at this point since the government seems to still be negotiating with Tesla.

Sure enough, Luhut’s comment today confirmed that Tesla is not interested in a vehicle factory in the country. A cathode factory, like it is building in Texas, would certainly make more sense.