Tesla strikes $5 billion deal to buy nickel products from Indonesia

Tesla has signed contracts worth about $5 billion to purchase materials for their batteries from nickel processing companies in Indonesia, a senior cabinet minister said.

The country has been trying to get Tesla to set up a production facility. The country has major nickel reserves.

President Joko Widodo met with Tesla co-founder Elon Musk this year.

“We are still in constant negotiation with Tesla … but they have started buying two excellent products from Indonesia,” said Luhut Pandjaitan, the Coordinating Minister for Maritime and Investment Affairs, in an interview.

He said the automaker signed a five-year contract with nickel processing companies operating out of Morowali in Sulawesi island.

The nickel materials will be utilized in the lithium batteries of the automaker.

The government plans to impose an export tax on these metals to increase revenue while encouraging more domestic production of higher-value products.