Tesla submits investment proposal for a battery project in nickel-rich Indonesia

Tesla has reportedly officially submitted an investment proposal for a battery project in nickel-rich Indonesia, according to a government official.

Tesla and Indonesia

Late last year, 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.

Later, we also learned that Tesla was actually in talks with Indonesia not just about nickel, but to possibly build a full battery factory in the country.

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.

In short, the country is saying that if you want its resources, you are going to have to create jobs and process nickel locally or even produce the battery cells in the country.

The strategy has been working with LG signing a massive ~$10 billion deal to make batteries in Indonesia.

Now Tesla is moving forward with a proposal

Now we learn that Tesla has actually submitted an investment proposal for a project in the country.

Indonesia’s deputy head for investment and mining coordination, Septian Hario Seto, confirmed the news on Friday (via Reuters):

I received their proposal yesterday morning… next week we will meet them (virtually) to get an official explanation.

The deputy wouldn’t confirm the extent of the project, but he did confirm that it wouldn’t be just about extracting raw material:

If they only want to buy raw materials, we are not interested. This (proposal) is beyond just taking the raw material.

At this point, it’s unclear if Tesla plans to invest in building a battery factory in the country or if it would build a plant to produce cathode materials from locally sourced nickel.

More information should be released in the coming weeks.