Revealed: VW, Ford and Tesla EV batteries linked to rainforest destruction on indigenous lands

Batteries destined for electric cars made by Volkswagen, Ford and Tesla may contain nickel mined in Indonesian woodlands devastated by deforestation, a new investigation has found — raising uncomfortable questions about how clean the electric car revolution really is. The analysis, published by The Guardian on 16 October, traces ore from two mines in Sulawesi through a chain of smelters and Chinese processing plants to the world's biggest battery manufacturers, and from there to the vehicles of some of the auto industry's biggest names.

What the investigation found

Drawing on corporate disclosures and trade flows from the past two years, the investigation links mines in the battery supply chains of major carmakers to the loss of trees in Sulawesi, a wildlife hotspot that holds the world's largest nickel deposits. The metal is prized by the battery industry because it boosts the energy density of cathodes in car batteries, extending driving range.

Ore from the Cahaya and Hengjaya mines was traced through regional smelters to processing plants in China run by Zhejiang Huayou Cobalt, a cathode manufacturer that supplies CATL — the world's largest battery maker. Huayou's own corporate reports list US and European carmakers among its end-users, while corporate filings and trade data reveal a separate route from Huayou to LG, the South Korean group that also supplies battery products to leading carmakers, via Poland. Satellite analysis shows the mines have driven widespread clearing of primary rainforest in nickel-rich lands inhabited by the indigenous Tolaki people.

Crucially, the reporting stops short of claiming that any single brand bought nickel directly from these mines. What it establishes is a supply chain that runs from deforested Tolaki land to the cathode and battery giants that power much of the global EV fleet — and that Volkswagen, Ford and Tesla are among the carmakers whose vehicles may contain that nickel.

The supply chain: from Sulawesi forest to the family car

The trail begins in Southeast Sulawesi, where the Cahaya concession alone covers some 21,000 hectares. The investigation found that ore from Cahaya and Hengjaya continues to flow to a regional plant, with local lorry drivers confirming deliveries by road. The operator of the Cahaya mine, Sulawesi Cahaya Mineral, received two administrative sanctions last year for illegally clearing more than 450 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.

From Indonesia, the ore moves to smelters and then to Chinese processors. Huayou converts nickel into cathode precursor materials destined for battery makers, with CATL the headline recipient. End-users of Huayou cathodes, or recipients of shipments from CATL, identified in the reporting include Volkswagen, Volvo, Ford, General Motors, Tesla, BMW, Stellantis and Hyundai; Mercedes-Benz was separately linked to Huayou. A Renault Group statement went further than most, acknowledging it had identified a nickel mining site in Sulawesi as a tier-n — that is, indirect — supplier in its battery supply chain and that it was working with partners to verify environmental information concerning Sulawesi Cahaya Mineral.

The complexity is the point. Between a mine in Sulawesi and a car on a forecourt sit smelters, processors, cathode makers, cell manufacturers and pack assemblers, many operating under confidentiality clauses. Each handoff dilutes traceability, which is why carmakers can truthfully say they do not source nickel directly — and why that answer increasingly satisfies nobody.

The Tolaki people and the forest they are losing

For the Tolaki people, the forests of Sulawesi are not scenery but survival — the basis of cultural identity, livelihoods and spiritual life. “We used to ask the forest for protection in return for our offerings,” Wadimula, a Tolaki elder whose home sits on the edge of the Cahaya concession, told investigators. “Destroying it means destroying our own life.”

Satellite analysis confirms what residents describe: primary rainforest giving way to mine pits and access roads. Sulawesi is a biodiversity hotspot, home to species found nowhere else on Earth, and nickel-rich concessions overlap extensively with these habitats. The mines operate in areas the Indonesian government has designated as “production forests”, a classification that permits industrial activity — and Jakarta has recently loosened restrictions and handed mining companies exemptions as demand for nickel soars. For communities watching their forests disappear, the legal fine print offers little comfort.

How the carmakers responded

Approached for comment, the carmakers offered a familiar repertoire: commitments to responsible sourcing, risk assessments and supplier standards. Many said they did not source nickel directly, that they assessed and worked to mitigate adverse impacts, and that suppliers were required to comply with responsible sourcing codes. Several declined to share the results of on-site audits.

Volkswagen — which powered one-quarter of its vehicles with CATL battery systems in 2024 — said it could not rule out that the implicated companies fell within its supply chain. The company said it took potential supply-chain risks very seriously, but that contractual obligations with business partners prevented it from disclosing specific details of supplier relationships. Ford said it was committed to protecting human rights and the environment and was reviewing the allegations to determine any appropriate next steps. Mercedes-Benz said it took reports of environmental and social harm in raw material supply chains, including nickel from Indonesia, seriously and assessed them as part of risk-based due diligence.

Industry watchdogs will note what is missing: no company named a mine, no company published an audit, and no company said it would stop buying. The responses are the language of compliance, not of consequence.

Why the car industry cannot simply walk away

Indonesia dominates global nickel supply so completely that avoidance is not a strategy available to any carmaker operating at scale. The country sits on the world's largest deposits, and the cost advantage of its ore — even after processing in China — underpins the economics of affordable electric cars. CATL and LG between them supply the majority of EV batteries used in modern vehicles, and both sit downstream of Huayou.

That concentration creates a bind. Carmakers have pledged to electrify their fleets at speed, governments are mandating it, and investors are demanding it — all of which increases demand for the very minerals implicated in deforestation. Walking away from Indonesian nickel would mean walking away from the cheapest path to an electric future. Nickel remains one of the most strategically watched battery metals on global markets, and every price spike strengthens the incentive to mine more of it, faster.

What this means for the ‘clean’ electric car

None of this changes the basic arithmetic that electric cars produce no exhaust emissions and that, over their lifetimes, they are typically far less carbon-intensive than petrol and diesel vehicles. But it does complicate the moral story the industry tells about them. A car can be clean at the tailpipe and destructive at the mine — and the destruction is not an accident but a feature of how the supply chain is currently organised.

The deeper problem is traceability. Promises of responsible sourcing mean little when carmakers cannot say — or will not say — where their nickel comes from, when audits stay private, and when the companies at the bottom of the chain operate under regulatory regimes that treat primary rainforest as a production zone. The EU's battery regulation is phasing in digital battery passports intended to document the provenance of battery materials, but passports are only as honest as the data entered into them.

For the industry, the Sulawesi findings are another entry in a lengthening file: cobalt mining in the Democratic Republic of Congo, lithium extraction in the Andes, and now nickel deforestation in Indonesia. Each episode follows the same script — revelation, review, reassurance — and the script has yet to produce a supply chain anyone can call clean with a straight face. Until audits are public, sourcing is disclosed to the mine, and sanctions have teeth, the ‘clean’ EV will remain a promise made at the showroom that is broken in the forest.

FAQs

Which carmakers are actually named in the investigation?
Volkswagen, Ford and Tesla are the headline names, but they are not the only ones. The reporting also identifies Volvo, General Motors, BMW, Stellantis and Hyundai as end-users of Huayou cathodes or recipients of CATL shipments, with Mercedes-Benz separately linked to Huayou. The important nuance is that none are accused of buying nickel directly from the Cahaya or Hengjaya mines; the link runs through smelters, processors and battery giants. That layered structure is precisely what makes accountability so difficult to pin down.

How did investigators trace nickel from a mine in Sulawesi to a car battery?
They combined corporate disclosures, two years of trade-flow data, satellite analysis of deforestation, and on-the-ground reporting — including local lorry drivers who confirmed ore from the Hengjaya mine was still being delivered to a regional plant by road. By matching mine output with smelter intake, processing records at Huayou, and cathode shipments to CATL and LG, the analysis reconstructed the chain step by step. It is painstaking work, and it exposes how little of this traceability the carmakers themselves appear to do.

Why is nickel so important to electric car batteries?
Nickel is used in the cathode — the positive electrode — of the dominant battery chemistries in Western EVs, known as NMC (nickel-manganese-cobalt) and NCA (nickel-cobalt-aluminium). More nickel means higher energy density and therefore longer driving range, which is why manufacturers have been pushing nickel content ever higher. Notably, the growing share of LFP (lithium-iron-phosphate) batteries — which contain no nickel at all — shows the industry does have a technical alternative, though LFP currently trades range for cost.

What has Indonesia done about the deforestation at these mines?
Administratively, something: the Cahaya mine operator, Sulawesi Cahaya Mineral, received two sanctions last year for clearing more than 450 hectares beyond its permitted area. But the broader policy direction runs the other way — Jakarta has loosened restrictions and granted mining companies exemptions amid surging nickel demand, and the concessions sit in designated “production forests” where industrial activity is legal. Environmental groups argue that the current regime treats sanctions as a cost of doing business rather than a deterrent.

Can car buyers do anything about this?
Individually, the honest answer is: not much, because supply chains are opaque by design. But consumers and investors can demand mine-level disclosure, public audit results and binding sourcing standards — pressure that has, in other industries, forced change. The EU's incoming digital battery passports may eventually let buyers see where their battery's minerals came from. Until then, the most effective lever is regulatory: due-diligence laws that make carmakers legally responsible for what happens at the bottom of their supply chains.