Coordinating Maritime and Investment Affairs Minister Luhut Pandjaitan told Reuters on Thursday that negotiations between the two parties are “still ongoing”.

The latest news about the negotiation came after the government invited Tesla CEO Elon Musk to the Group of 20 Leaders’ Summit in Nusa Dua, Bali.  

Luhut, who leads the talks with Tesla, declined to disclose further details, citing a non-disclosure agreement.

As the world’s largest producer of nickel, a key ingredient in electric vehicle (EV) battery production, the country has targeted to become a global EV hub and has invited the largest electric carmakers and battery producers to invest in Indonesia. It has also banned the export of nickel ore and pushed the construction of more smelters to process the mineral.  

Hyundai started production of EVs in Cikarang, West Java, last year while a battery production hub, supported by investment from LG Energy Solution, was inaugurated in Batang, Central Java, and is targeted to begin production in 2024. 

The government has been wooing Tesla to invest in the country over the past few years. President Jokowi “Jokowi” Widodo and Luhut visited the Tesla headquarters and met CEO Elon Musk during their visit to the US in May last year.

Read also: Indonesia woos Tesla with green energy

Musk was invited to the G20 Summit in Bali and initially planned to come to the event, but later canceled his trip as he was completing his Twitter takeover. He eventually attended the event online and made no specific address to investment plans

Bloomberg reported on Wednesday that Tesla Inc was nearing a preliminary deal to build production facilities in Indonesia with a capacity of 1 million units, citing people familiar on the matter.

Tesla makes its electric cars at its gigafactories in Shanghai, Austin, Berlin and California, and is reportedly set to announce a new factory in Mexico's Nuevo Leon state.

The report said that the talks included plans for production facilities and facilitating the company's supply chain.

Equally as guarded as Luhut, Elon denied the report in a tweet replying to a post about the news. 

“Please be cautious about writing articles citing ‘unnamed sources’, as they are frequently false,” he said. 

There were speculations that Musk was adamant he would not invest in Indonesia because of the country’s poor environmental standards.

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It was reported last year that Tesla signed a long-term deal with Brazilian miner Vale to supply the carmaker with nickel for its Canadian operations.

The Brazilian miner said in a securities filing that the agreement involves supplying Tesla with low-carbon Class 1 nickel and was in line with its strategy of increasing its exposure to the EV industry.

The plan to build factories in Indonesia received a positive response from the media.

“Since Tesla has started its own production of batteries, additional production capacity located in Indonesia, where there are reserves of the necessary metals, is a smart move,” wrote automotive blogger Eva Fox on news site Tesmanian.com.

She also said the production of cars in the country would be convenient, as it would be possible to supply the markets of Australia, New Zealand and Taiwan.