Tesla (TSLA) is considering a battery factory in Indonesia, says local officials

Tesla (TSLA) is reportedly considering building a battery factory in Indonesia, according to comments from two local officials.

Earlier this month, 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.

Recently,  CEO Elon Musk pleaded with mining companies to increase their nickel production.

Now we’ve learned that Tesla’s talks with Indonesia might actually be about building a full battery factory in the country.

Minister of Industry Agus Gumiwang told CNBC that the discussion with Tesla is “ongoing” about a battery factory:

Minister of Industry (Menperin) Agus Gumiwang confirmed about Tesla’s plan, he said that Tesla would later be directed to build a factory in Batang. Currently the discussion process between Tesla and the government is still ongoing.

It would be in Batang, a regency on the north coast of the Central Java province in Indonesia.

Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, also commented on the situation and said that he told Tesla that they would secure their nickel reserve if they invest in building a battery factory in the country:

“I said you put the investment here today, we will give the reserves. So, if we always change from commodity base to downstream. So, we see production downstream. That will turn Indonesia into a great country into the global supply chain, “

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

At its Battery Day event last month, Tesla detailed its plan to ramp up production of its own battery cells to 200 GWh of annual production capacity in 2023 and 3 TWh in 2030.

This unprecedented level of battery production is going to require several factories across the world and a complex global supply chain.