An analysis of corporate disclosures and trade flows has found that batteries used by Volkswagen, Ford and Tesla may contain nickel mined in indigenous forests on the Indonesian island of Sulawesi, where satellite data shows widespread deforestation of primary rainforest.
Electric vehicle batteries rely on nickel for energy density and range, and Indonesia holds the world's largest nickel deposits. The analysis, based on corporate filings and trade data from the last two years, traced ore from the Cahaya and Hengjaya mines through regional smelters and Chinese processing plants run by Zhejiang Huayou Cobalt, a cathode manufacturer that supplies CATL, the world's largest battery maker. Huayou's corporate reports list US and European carmakers as end-users. A separate route was identified from Huayou to LG, a South Korean group that supplies battery products to leading carmakers, via Poland.
Satellite analysis shows the mines have led to widespread deforestation of primary rainforest in lands inhabited by the indigenous Tolaki people. Wadimula, a Tolaki elder whose home sits on the edge of the 21,000-hectare Cahaya mining concession, said: 'We used to ask the forest for protection in return for our offerings. Destroying it means destroying our own life.'
Electric vehicles are less environmentally harmful than fossil fuel-burning engines, but western carmakers have struggled to clean up supply chains for batteries built with critical minerals from Africa, Asia and South America. Environmental groups warn that a failure to curb the boom of material extraction risks replicating the very environmental destruction EVs are meant to reduce.
Analysis
Why This Matters
- The findings expose a direct link between the EV revolution and deforestation of primary rainforest on indigenous lands, challenging claims that electric vehicles are entirely 'green.'
- Major automakers risk facing consumer backlash or regulatory action if they cannot prove their supply chains are free from environmental destruction.
- The case highlights the wider challenge of securing critical minerals for the energy transition without harming vulnerable ecosystems and communities.
Background
Nickel is a key component in many EV batteries because it boosts energy density, extending vehicle range. Indonesia has rapidly expanded nickel mining to meet surging global demand, particularly on the island of Sulawesi, a biodiversity hotspot. The Tolaki people have lived in the region's forests for generations, depending on them for food, water and cultural practices. Previous investigations have documented links between nickel mining in Indonesia and deforestation, but this analysis is the first to trace the supply chain into major western carmakers.
Key Perspectives
Automakers (VW, Ford, Tesla): They have publicly committed to sustainable supply chains and reducing carbon footprints. They may argue that they rely on suppliers' certifications and are working to improve traceability, but the analysis suggests current due diligence is failing to prevent deforestation.
Indigenous Tolaki people: They face displacement, loss of livelihood, and destruction of sacred forests. Their land rights are often poorly recognised in Indonesian law, limiting their ability to resist mining concessions.
Environmental groups: They argue that without stricter regulation of mining practices and mandatory supply chain reporting, the environmental costs of EVs will simply be displaced to the Global South. They call for binding rules on due diligence for critical minerals.
What to Watch
- Public statements from VW, Ford, and Tesla responding to these supply chain links and any concrete steps they announce to cut ties with the implicated mines.
- Regulatory developments in the EU and the US, where laws on forced labour and deforestation-free supply chains are being debated or implemented.
- Satellite monitoring of deforestation rates in the Cahaya and Hengjaya concession areas over the coming months.