Nickel-rich Indonesia pitches EV battery plant plan to Elon Musk

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Elon Musk, center, arrives for the 10th World Water Forum in Nusa Dua, Bali, Indonesia on Monday, May 20, 2024. (AP Photo/Firdia Lisnawati)

DENPASAR, Indonesia (AP) — Indonesia’s top investment official said Monday that the government has proposed to Tesla CEO Elon Musk the construction of an electric vehicle battery plant in the nickel-rich country.

The official spoke after Musk met with Indonesian President Joko Widodo while attending a water conference on the island of Bali.

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“We made an offer, is it possible to build an EV battery factory, precursor to cathodes, here. And he said he will consider it,” Coordinating Maritime Affairs and Investment Luhut Binsar Pandjaitan, told reporters.

Indonesia is keen to build up industries to exploit is rich natural resources, which include the world’s largest nickel reserves. Nickel is an important material for EV batteries and solar panels.

The billionaire head of Tesla and SpaceX and owner of social platform X was visiting the Indonesian resort island to launch a Starlink satellite internet service there.

He also spoke to officials and experts attending the conference on global water challenges, saying he believed that desalination could solve water shortages if enough energy was provided.

Indonesia supplies 40% of the world’s nickel and has the potential to increase this to 75% by 2030, according to the government data. The government has set a goal of producing 600,000 electric vehicles by 2030, and will require EVs and related components produced in Indonesia to contain of 60% local content by 2027.

The country has been trying for years to secure deals with Musk’s Tesla on battery investment and for Musk’s SpaceX to provide fast internet access for remote areas of the sprawling archipelago.

Pandjaitan, a powerful cabinet minister and close ally of Widodo, said the president also asked the billionaire to invest in an AI center and for SpaceX to build a launchpad in Biak, an island in Indonesia’s easternmost Papua province.

Musk did not make any formal announcements related to his investment plans in Southeast Asia’s largest economy.

“Well, I think it’s likely that we will be investing,” Musk said in replying to a journalist's question about his plans for Indonesia at a news conference on Sunday after the ceremonial launch of the Starlink service alongside Indonesian government dignitaries. “But I think it’s quite likely that my company will invest in Indonesia.”

Back in the United States, federal highway safety investigators are asking Tesla to explain how and why it developed a fix in a recall of more than 2 million vehicles equipped with the company’s Autopilot partially automated driving system.

Investigators with the U.S. National Highway Traffic Safety Administration have concerns about whether the recall remedy worked because Tesla has reported 20 crashes since the remedy was sent out as an online software update in December.

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Karmini reported from Jakarta, Indonesia

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