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Tesla has contacted Indonesia informally about the possibility of an investment in the country, which is a major producer of the battery metal nickel, a senior Indonesian official said on Monday.
“We need further discussion with Tesla,” Reuters quoted Ayodhia Kalake, a senior official at the Coordinating Ministry for Maritime and Investment, as saying. Kalake added that it was an early discussion with no details yet.
Tesla wants to ramp up production of batteries as it increases EV production and models, and its chief executive, Elon Musk, has recently pleaded with nickel miners to produce more nickel, which would support the global expansion of batteries and electric vehicles.
“Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way. So hopefully, this message goes out to all mining companies,” Musk said on the Q2 earnings call at the end of July.
The nickel-based cells have a higher energy density, so they have a longer range, Tesla’s chief executive noted on the call.
In an exchange on Twitter several days later, Musk said that “Nickel is the biggest challenge for high-volume, long-range batteries! Australia & Canada are doing pretty well. US nickel production is objectively very lame. Indonesia is great!”
Analysts said at the time that obtaining nickel with a low-carbon footprint could prove difficult for Tesla, as miners in Indonesia are reportedly pumping the waste in open seas.
Last month, reports emerged that Tesla was in talks with Canada’s Giga Metals to potentially help it develop a nickel mine and buy the low-emissions nickel production for its batteries.
Also in September, another Indonesian official said that the country had signed a deal to build a lithium battery factory in the country with LG Chem of South Korea and China’s Contemporary Amperex Technology Ltd (CATL), both of which are Tesla suppliers.
On Tesla’s Battery Day in September, Musk said that Tesla plans “to increase, not reduce battery cell purchases from Panasonic, LG & CATL (possibly other partners too).”
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com