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Tesla to Make EV Batteries in Indonesia to Capture South Asian Market

Tesla is planning to set up a battery materials manufacturing facility in Indonesia in the coming months.

In an Instagram post, Indonesian coordinating minister of maritime and investment affairs Luhut Pandjaitan said that he led a delegation that met with Tesla CEO Elon Musk in San Francisco, where Musk discussed the investment plan.

He intends to make a hefty investment in lithium battery materials. Elon will visit Indonesia in September or October, the senior minister added.

A Reuters article recently revealed that Indonesia gave automakers two more years to qualify for electric vehicle (EV) incentives after investment from Neta and Mitsubishi.

The eased investment regulations require manufacturers to produce at least 40% of their EVs in Indonesia by 2026. The research stated that the 40% limit encouraged local battery development.

Indonesia has been pursuing Tesla’s investment since October 2020. The country disclosed in February 2021 that Tesla proposed a battery facility for EV batteries, but the plans fell through.

In February, Indonesian President Joko Widodo expressed confidence that Tesla would still invest in the country. With this investment, the US-based EV maker aims to grab a major chunk of the South Asian EV market share.

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