VW, Ford and Tesla Batteries Linked to Deforestation in Indonesia

Volkswagen, Ford and Tesla are among the carmakers whose EV batteries may contain nickel mined from indigenous woodlands hit by widespread deforestation, according to a new analysis reported by The Guardian.

The findings center on Sulawesi, an Indonesian wildlife hotspot that holds the world's largest nickel deposits. An examination of corporate disclosures and trade flows from the last two years shows mines in the battery supply chains of major western automakers are linked to tree loss in nickel-rich lands inhabited by the Tolaki people.

The report, published October 16, frames a hard question for the industry: can manufacturers build electric vehicles that are genuinely free from environmental destruction? So far, the supply chain evidence suggests they can't yet.

Why nickel keeps showing up in this story

Nickel is a staple of EV battery cathodes because it boosts energy density and extends driving range. That performance advantage is exactly what pulls automakers toward Indonesian supply. The same demand, though, puts mining pressure on some of the most ecologically sensitive land in the region.

Sulawesi sits at the intersection of two trends practitioners know well: the global push for cheaper, higher-density batteries, and the tightening scrutiny of where raw materials actually come from.

What does this change for the industry?

For supply-chain and compliance teams, the analysis raises the bar on traceability. If nickel linked to primary rainforest loss can reach the batteries of VW, Ford and Tesla, then existing due-diligence systems at even the largest automakers have visible gaps.

The exposure cuts across disclosure practices too. The analysis drew on corporate disclosures and trade-flow data spanning two years, meaning the connections sit in documents companies have already filed. That makes the material defensible and hard to dismiss.

For buyers and investors, the signal is that battery ESG risk now extends beyond emissions to land use and indigenous rights.

The bigger picture

The Tolaki people inhabit the nickel-rich lands at the center of the findings. The Guardian reports that primary rainforest in these areas has seen widespread deforestation linked to mining operations feeding carmaker supply chains.

That puts western automakers in an awkward position: they market EVs as the cleaner choice while their battery inputs draw on landscapes experiencing some of the fastest forest loss in the sector.

Expect the pressure to intensify. As traceability tools improve and journalists keep mapping trade flows, supply-chain links like these will surface faster. Automakers that can verify nickel provenance before regulators or reporters force the issue will hold the advantage.