Volkswagen, Ford and Tesla are among the electric carmakers whose batteries may contain nickel mined in indigenous woodlands plagued by deforestation, an analysis has found, highlighting the struggle to make vehicles that are free from environmental destruction.
Corporate disclosures and trade flows from the last two years show mines in the battery supply chains of automotive giants are linked to the loss of trees in Sulawesi, a wildlife hotspot in Indonesia that houses the world’s largest nickel deposits. The metal is widely used in cathodes in car batteries because it boosts energy density and increases range.
Ore from the Cahaya and Hengjaya mines was traced 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, while additional corporate files and trade data show a separate route from Huayou to LG, a South Korean group that also supplies battery products to leading carmakers, via Poland.
Satellite analysis shows the mines have led to widespread deforestation of primary rainforest in nickel-rich lands inhabited by the indigenous Tolaki people.
“We used to ask the forest for protection in return for our offerings,” said Wadimula, a Tolaki elder whose home sits on the edge of the ۲۱,۰۰۰-hectare Cahaya mining concession. “Destroying it means destroying our own life.”
Electric vehicles are less environmentally harmful than fossil fuel-burning engines, which spew gases that foul the air and heat the planet, 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-hungry SUVs is exacerbating the destruction by increasing the quantity mined.
Ore from the two mining concessions is sent to a nickel smelter in an industrial complex in Morowali, on Indonesia’s eastern coast, operated by Huayou’s local subsidiary, where limonite is refined into mixed hydroxide precipitate, the primary raw material used to make battery cathodes.
In ۲۰۲۴, $۶۰۶m worth of mixed hydroxide precipitate was shipped from the Morowali plant to ports in China, followed by further shipments worth $۴۷۰m in ۲۰۲۵. The processed ore was transported overland to Huayou cathode manufacturing sites in Quzhou, near Shanghai, and Yulin, near the border with Vietnam.
Public filings do not disclose specific volumes or timings of sales from Huayou to CATL, which would be needed to directly connect specific ore shipments to car batteries, but Huayou confirmed group-level supplies to CATL in response to a regulatory inquiry by the Shanghai Stock Exchange in ۲۰۲۴. Chengdu B&M, a downstream subsidiary of Huayou, has also confirmed the supply of “large quantities” to CATL.
The investigation, published in partnership with Voxeurop and other European media partners, traced shipments from mines and refineries in Sulawesi to China, and then again from Huayou cathode and CATL battery factories to the assembly lines of carmakers in the US and Europe. Volkswagen’s facility in Braunschweig, for instance, received a shipment in October ۲۰۲۴ of ۲۴ tonnes of cell modules worth about $۳۹۰,۰۰۰, according to data from Volza, a trade platform.
The shift to a carbon-free economy is pushing up demand for critical minerals in countries with weak environmental safeguards, though experts have argued the mining boom can be tempered without slowing the shift away from dirty fuels. In ۲۰۲۳, a report found lithium demand in the US transport sector could be reduced by ۱۸% to ۶۶% compared with a business-as-usual scenario, by improving public transport, walking and cycling more, and buying smaller cars. Better recycling could bring demand reductions as high as ۹۲%, the report found.
Global demand for nickel is set to double to ۵.۵m tonnes by ۲۰۴۰, according to the International Energy Agency, much of it mined in Indonesia and then refined in China. The loss of trees in mining concessions means the carbon footprint of nickel from the worst mines may be up to ۵۰۰ times greater than previously reported, a study in Nature Communications found last year.
The Cahaya and Hengjaya mines are located in woodlands designated as “production forest”, which are intended for forestry rather than industrial activities. However, successive Indonesian governments have weakened safeguards and carved out exemptions for miners as demand for nickel has soared.
Nickel mining may be responsible for two-thirds of the forest loss recorded since ۲۰۰۱ within the area encompassed by the Cahaya concession, and over half of the loss in the Hengjaya concession, spatial analysis conducted by geospatial firm The TreeMap suggests.
Sulawesi Cahaya Mineral (SCM), the company that operates the Cahaya mine, contributed to clearing an additional ۳۳۰ hectares of forest in ۲۰۲۴, according to an analysis by Auriga, an Indonesian nonprofit. The same year, it delivered ۱۱m tonnes of limonite ore – almost all of its production – to Huayou’s smelter. Deliveries increased to nearly ۱۲.۵m tonnes throughout ۲۰۲۵. The plant also continued to receive ore from the Hengjaya mine by road, local lorry drivers said.
SCM received two administrative sanctions last year for illegally clearing more than ۴۵۰ hectares of forest beyond the boundaries of its permitted clearing area. The company is a subsidiary of Merdeka Battery Materials, part of a group whose shareholders include Huayou and CATL.
The carmakers identified as end-users of Huayou cathodes or recipients of shipments from CATL include Volkswagen, Volvo, Ford, General Motors, Tesla, BMW, Stellantis and Hyundai. Mercedes-Benz was separately linked to Huayou.
Many of the companies said they did not source nickel directly, they assessed and mitigated adverse impacts, and they required suppliers to comply with responsible sourcing standards. They declined to share the results of on-site audits.
Volkswagen, Europe’s leading manufacturer, which powered one-quarter of its vehicles with CATL systems in ۲۰۲۴, said it could not rule out that the companies may fall within its supply chain.
Volkswagen said: “We take potential risks in our supply chain very seriously. However, due to contractual obligations with our business partners, we cannot disclose specific details on our supplier relationships or their supply chain.”
Ford said: “We are committed to protecting human rights and the environment. We are reviewing the allegations and will determine any appropriate next steps based on that review.”
Mercedes-Benz said: “We take reports of environmental and social harm in raw material supply chains – including nickel from Indonesia – seriously and assess them as part of our risk-based due diligence.”
Renault Group said: “We have identified a nickel mining site in Sulawesi, Indonesia, as being a tier-n supplier (eg. indirect) in our battery supply chain. We have engaged with the relevant business partners to verify some ESG information concerning Sulawesi Cahaya Mineral.”
Volvo Cars said: “During ۲۰۲۵, we conducted […] onsite audits […] on suppliers [who are] part of our battery supply chains, two of them located in Indonesia […] with further battery supply chain partners during ۲۰۲۶ and onward.”
General Motors said: “We are aware that nickel mining in Indonesia presents significant environmental, human-rights and community-related risks.”
Stellantis said: “We are aware of the environmental and social challenges associated with nickel production in Indonesia, including risks related to deforestation, biodiversity loss and ecosystem degradation.”
Hyundai said: “We recognise the importance of protecting forests, biodiversity and local communities. We regularly monitor and assess our suppliers, including mineral suppliers, to ensure compliance.”
CATL, Huayou, SCM and Tesla did not respond to requests for comment. Tsingshan, the main shareholder of Nickel Industries, which operates Hengjaya mine, did not respond to a request for comment.
This investigation was supported by Journalismfund Europe and The Pulitzer Center. Lorenzo Di Stasi and James Jackson contributed reporting.
