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.
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 2024, $606m worth of mixed hydroxide precipitate was shipped from the Morowali plant to ports in China, followed by further shipments worth $470m in 2025.
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 2024. 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 2024 of 24 tonnes of cell modules worth about $390,000, 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 2023, a report found lithium demand in the US transport sector could be reduced by 18% to 66% 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 92%, the report found. Global demand for nickel is set to double to 5.5m tonnes by 2040, according to the International Energy Agency, much of it mined in Indonesia and then refined in China.
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