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[Tesla] Indonesia or Canada ?

admin 2022.08.19 06:15 Views : 95

Maybe Tesla's Next EV Plant Can Go Here. A Decision Could Come This Year. -- Barrons.com

 

Maybe Tesla can put its next electric vehicle manufacturing facility in Indonesia. The Indonesian president seems to support the idea.

 

President Joko Widodo has urged Tesla (ticker: TSLA) to make cars in his country, according to a report from Bloomberg. Tesla didn't immediately respond to a request for comment.

 

Tesla is looking for manufacturing sites, though. It currently has four car plants that, when up and running, should be able to produce between two million and 2.5 million EVs a year. But Tesla is expected to be producing more than three million vehicles a year by mid-decade.

 

CEO Elon Musk said at his company's annual shareholder meeting this August that Tesla's next plant location could be announced in late 2022. Musk aims to make 20 million cars a year. He says reaching that number, a goal he has described as aspirational, will take roughly 12 manufacturing facilities.

 

Indonesia might be positioning itself for that business. The country does have nickel, an important metal for making EV batteries. Indonesia accounts for more than one-third of global nickel output. Tesla has also signed an agreement with Indonesia to secure some of its nickel requirements for the coming few years.

 

But the Indonesia car business is fairly small. That would affect the supply of parts for any auto manufacturer moving into the country. Indonesia produced and sold roughly one million passenger vehicles in 2021, while the figure for China is more than 20 million.

 

What is more, Indonesia is a relatively poor country. Domestic demand might not soak up a lot of Teslas. Gross domestic product per capita -- a measure of the wealth of countries -- is roughly $4,500 in Indonesia. It's about $75,000 in the U.S.

 

That would mean an Indonesian plant likely would rely on exports to the rest of the world.

 

Investors can expect to hear more in coming months from countries, states, and towns competing for Tesla's business. At Tesla's annual meeting an attendee shouted out Canada at Musk as an option for a new plant. "We've got a lot of Canadas," Musk responded. "I'm half Canadian, so maybe I should."

 

Put Canada on the list of potentials sites too.