"There has been a positive direction," he said on February 23, 2023.

Read also: BYD Group, Tesla in final stage to invest in Indonesia, Luhut says

Since Tesla is a publicly listed company, Seto was unable to disclose more information about the company's requests from Indonesia and the details of the discussion between the two parties.

"It is a secret," he said, when asked on why it took long for Indonesia and Tesla to negotiate.

Downstream industry development to attract investors

Reuters news agency previously reported that President Joko "Jokowi" Widodo was confident that Tesla Inc., which was co-founded by business magnate and investor Elon Musk, would finalize a deal to invest in a production facility in Indonesia, having offered the US carmaker incentives ranging from tax breaks to a concession to nickel mine.

The Southeast Asia's largest economy has been wooing Tesla to invest in battery and car manufacturing since 2020, seeking to leverage its rich reserves of nickel ore, which can be processed for use in EV batteries.

Tesla is looking for an additional manufacturing hub. The company currently manufactures EVs in four locations: Fremont, California; Austin, Texas; Shanghai, China; and outside Berlin, Germany. Analysts estimate that Tesla would need to build seven or eight more “gigafactories” to meet Musk’s target of selling 20 million EVs by 2030. South Korea, Canada and Mexico have also been vying for Tesla to invest in manufacturing.

Read also: Indonesia’s downstream mineral industry ambitions still have a long way to go

Seto said that the key to the success of the development of mineral downstream industry would be to attract the global electric vehicle industry to invest in Indonesia. If the country could not attract investors, the development of the nickel downstream industry for lithium batteries would stuck on precursor and cathodes.

China vs US competition in BEVs

Seto said that Indonesia has also been in talk with the world's biggest electric vehicle producer BYD of China. He said that in the next two weeks, he and the ministry's Deputy for Infrastructure and Transportation Rachmat Kaimudin would visit China for negotiation.

"Next week or in the next two weeks, Pak Rachmat and I will go there," he added.

He said the cooperation with BYD would be an opportunity for Indonesia. "We know that currently, BYD is the number one electric vehicle seller, beating Tesla," he added.

Read also: Indonesia needs investment for developing EVs despite having good prospect

According to carscoops.com, BYD has published its full sales results for the 2022 calendar year and it is quickly closing in on Tesla as the world’s largest manufacturer and seller of EVs. Last year, the Chinese car manufacturer sold 911,410 battery-electric vehicles (BEVs), an extraordinary 184% increase from the number of BEVs it sold in 2021.

When factoring all of the plug-in hybrid vehicles that BYD also sold, it managed to sell 1,868,543 cars, a 214.7% increase from the 2021.

Tesla still holds the crown as the world’s largest producer of BEVs, selling a record 1,313,851 units throughout 2022. However, its sales "only" grew by 40% compared to the 184% of BYD. If the Chinese car manufacturer keeps up this momentum, it has the potential to overtake Tesla as the  EV leader in 2023.