Environmental groups urged Tesla on Monday to reconsider its plans for nickel investment in Indonesia, the world’s top producer of the material, as ESG scrutiny mounts in an industry crucial to the electric vehicle revolution.
In an open letter addressed to CEO Elon Musk and shareholders, dozens of organizations asked the EV giant to terminate direct investment plans in Indonesia’s nickel industry and bar nickel sourced and produced in the country from being used in Tesla’s cars
“The nickel industry in Indonesia has a record of environmental damage, criminalization threats that abuse democracy and equity, the threats to the vulnerable groups, and multiple violations of law,” read the letter, which was signed by groups representing Indonesian and US civil society organizations.
The letter warned that nickel mining would shrink forests, pollute water and disrupt the lives of indigenous communities. The groups pointed to Wawonii Island, in Indonesia’s Southeast Sulawesi region, as an especially vulnerable area — writing that mining there has damaged coral reefs.
Representatives for Tesla and the Indonesian government didn’t immediately respond to requests for comment.
Indonesia, which holds almost a quarter of global nickel reserves, has courted investors from the EV sector. The metal is a crucial component in many batteries. Indonesia’s president, Joko Widodo, offered Musk the opportunity to invest in an end-to-end EV supply chain, according to a CNBC report in June.
Musk has said that procuring more nickel is a priority for Tesla as the automaker boosts output. “Please mine more nickel,” he urged producers on an earnings call two years ago. “Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way.”