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Tesla strikes $5 billion deal to purchase nickel products from Indonesia: report

Credit: @jokowi/Twitter

Recent reports suggest that Tesla had signed contracts worth about $5 billion to purchase nickel products from Indonesia. The materials will reportedly be supplied by nickel processing companies in the country. 

Indonesia has major nickel reserves, and it has been putting serious effort into attracting Tesla into the country. Being the world’s most esteemed electric vehicle maker and the largest automaker by market cap, the company requires a lot of nickel for its expansion plans in the coming years. 

As such, Indonesian officials including President Joko Widodo have met with Tesla CEO Elon Musk in the United States to drum up investment. A team from Tesla has also visited Indonesia to discuss a potential battery-related investment from the electric vehicle maker. 

In a statement to CNBC Indonesia on Monday, Coordinating Minister for Maritime and Investment Affairs Luhut Pandjaitan noted that Tesla has already started purchasing two products from Indonesia. However, the official also remarked that it is still in constant negotiation with Tesla. 

“We are still in constant negotiation with Tesla … but they have started buying two excellent products from Indonesia,” Pandjaitan said.

The official also noted that Tesla had signed a five-year contract with nickel processing companies that are operating out of Morowali, which is located on Sulawesi island, Indonesia. The nickel materials will reportedly be utilized in Tesla’s lithium-ion batteries, according to a Reuters report. 

Tesla has not issued a statement about the matter as of writing. 

Indonesia seems set on becoming a major force to be reckoned with in the electric vehicle sector. The country is so serious in its efforts to develop its battery industry that it has actually stopped its exports of nickel ore as a way to ensure supply for investors. Tesla definitely seems to be shaping up into one of these investors. 

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Tesla strikes $5 billion deal to purchase nickel products from Indonesia: report
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