Tesla Signs Huge $5 Billion Deal to Buy Products Made of Nickel in Indonesia
Nickel is a crucial element used in the electric batteries that power Tesla automobiles, therefore Elon Musk will need a lot of it if he expects to sell 20 million vehicles annually by 2030. And now, after wooing the Tesla CEO for years, it appears that the biggest source of the metal has succeeded.
According to a senior cabinet official, American automaker Tesla (TSLA.O) has agreements worth roughly $5 billion with Indonesian nickel processing firms to purchase components for their batteries.
The largest economy in Southeast Asia has been attempting to persuade Tesla to locate a production site in its vast nickel reserves. To encourage investment, President Joko Widodo met with Elon Musk, the founder of Tesla, earlier this year.
According to Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan, "We are still in constant negotiation with Tesla ... but they have started buying two excellent products from Indonesia,"
He said that Tesla entered into a five-year agreement with nickel processing businesses based in Morowali on the island of Sulawesi. The lithium batteries made by Tesla will utilize nickel components.
An email from Reuters requesting comment was not immediately answered by Tesla.
To order to ensure supply for investors, Indonesia banned exporting nickel ore. The country is eager to domestically develop the electric car and battery businesses. Chinese steel goliaths and South Korean firms like LG and Hyundai invested as a result of the decision.
However, the majority of nickel investments made to date have gone toward the manufacture of base metals like ferronickel and nickel pig iron.
According to a senior source who spoke to Reuters last week, the government intends to impose an export tax on certain metals in order to increase income and promote more domestic manufacturing of higher-value goods.
According to Indonesian media, CNGR Advanced Material, a Chinese battery manufacturer, was the other business that secured a contract for nickel with Tesla.
According to Luhut, Volkswagen, a German automaker, and Ford Motor Company, two other American automakers, have also formed collaboration agreements with Indonesian businesses as they embrace the alleged carbon-neutrality of electric vehicles.
Source: Reuters.com, Fortune.com, BenarNews.org