Tesla nears deal to build production facilities in Indonesia

January 12, 2023 9:31 am

Tesla China-made Model 3 vehicles are seen during a delivery event at its factory in Shanghai, China. [Source: Reuters]

Tesla Inc (TSLA.O) is nearing a preliminary deal to build production facilities in Indonesia with a capacity of one million units, Bloomberg News reported on Wednesday, citing people familiar with the matter.

The country’s investment minister confirmed talks with the world’s most valuable automaker, the report added.

The electric-vehicle maker and Indonesia’s Ministry of Investment did not immediately respond to Reuters requests for comment.

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Tesla makes its electric cars at its gigafactories in Shanghai, Austin, Berlin and Fremont, California and is reportedly set to announce a new factory in Mexico’s Nuevo Leon state.

The report said that the talks include plans for production facilities and to facilitate the company’s supply chain.

Chief executive Elon Musk said in November that South Korea was among its top candidate locations for a factory it plans to build in Asia for making EVs, according to South Korea’s presidential office.

Tesla has signed contracts worth about $5 billion to buy materials for their batteries from nickel processing companies in Indonesia, a senior cabinet minister told CNBC Indonesia last year.

However, Indonesian President Joko Widodo urged the electric vehicle maker to manufacture its cars, as well as batteries, in the country, in comments made to Bloomberg News in August.