In news that will surprise absolutely no one who has been paying attention to the phrase "critical mineral supply chain," an analysis has found that Volkswagen, Ford, and Tesla are among the electric carmakers whose batteries may contain nickel mined from indigenous woodlands in Sulawesi, Indonesia - woodlands that are currently being enthusiastically deforested. The metal, prized for boosting battery energy density and range, is turning out to have a carbon footprint roughly the size of a small moon.
Corporate disclosures and trade flows from the last two years show mines in the battery supply chains of automotive giants are linked to tree loss in Sulawesi, a wildlife hotspot that houses the world's largest nickel deposits. 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. It's like a game of geopolitical Clue, except the weapon is a battery and the victim is a rainforest.
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 21,000-hectare Cahaya mining concession. "Destroying it means destroying our own life." It's a sentiment that presumably did not make it into the carmakers' sustainability brochures.
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. So, in summary: buy a smaller car, maybe.
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. If you're keeping score at home, that's a lot of money changing hands for something that used to be a forest.
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. So, not a direct line, but more of a very suggestive dotted one.
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. That's roughly the weight of four adult elephants, if elephants were made of battery components and existential dread.
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. So, the solution is basically: walk, bike, and maybe don't buy a two-tonne electric SUV to commute to your office job.
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. The loss of trees in mining concessions means the carbon footprint of nickel from the worst mines may be up to 500 times greater than previously reported, a study in Nature Communications found last year. Five hundred times. That's not a rounding error; that's a rounding catastrophe.
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. It's almost as if the rules were made to be broken, or at least aggressively reinterpreted.
Nickel mining may be responsible for two-thirds of the forest loss recorded since 2001 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 330 hectares of forest in 2024, according to an analysis by Auriga, an Indonesian nonprofit. The same year, it delivered 11m tonnes of limonite ore - almost all of its production - to Huayou's smelter. Deliveries increased to nearly 12.5m tonnes throughout 2025. The plant also continued to receive ore from the Hengjaya mine by road, local lorry drivers said. So, business is booming, if by "business" you mean "deforestation."
SCM 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. Sanctions, it seems, are just the cost of doing business.
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. Because nothing says "responsible sourcing" like refusing to show your homework.
Volkswagen, Europe's leading manufacturer, which powered one-quarter of its vehicles with CATL systems in 2024, 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." Translation: we care, but not enough to, you know, tell you anything.
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 2025, 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 2026 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. Because sometimes the best PR strategy is to just not have one.
This investigation was supported by Journalismfund Europe and The Pulitzer Center. Lorenzo Di Stasi and James Jackson contributed reporting.