Indonesia: Jokowi Wants CKD EVs From Tesla, Not Just Batteries

Not content with Tesla being very interested in Indonesia’s vast natural resources to make batteries for its electric cars, the country seems to be implying that their consent comes at the commitment to make EVs within their borders as well.

It had been known that the US-based electric carmaker was close to finalising a deal to begin construction of a battery factory, taking advantage of Indonesia’s nickel and cobalt reserves, ample land area, and relatively inexpensive labour.

Tesla to manufacture EVs in Indonesia?

Following the initial investment proposal in late 2020, negotiations fell silent for a while before it was revealed to have stalled completely early in 2022 before being abruptly restarted again with a visit from Tesla CEO Elon Musk to Jakarta. In the months following that, it’s been mostly crickets.

According to a report by Bloomberg, Indonesian president Joko Widodo said that his government is much more interested in forming a “huge ecosystem of electric cars” with representatives also in talks with other automakers such as Ford, Toyota, and Suzuki. Clearly, the country’s ambitions lay far beyond being a source of raw materials.

The president’s interview does, however, echo a previous statement made by Indonesia’s minister of investment Bahlil Lahadalia, who revealed in May that negotiations with Tesla have been ongoing with positive reception to proposed EV manufacturing plant located in Central Java and Batang with an expected annual capacity of 500,000 units.

Since then, there has been no comment from either side about the progress of this proposal or if the discussions have stalled yet again, but we’ll see if Tesla is willing to accept the Indonesian government’s terms to secure raw materials or if the country blinks at the prospect of the high profile EV brand walking away from the deal altogether.

In the meantime, Indonesia does have other pots on the boil such as Toyota’s RM8 billion investment in the country for EV development, a potential Foxconn battery/EV factory coming up, and most recently Hyundai and LG securing RM3.2 billion in financing to build a battery cell plant in the Karawang region, east of Jakarta.