Environmental and human rights organizations have co-signed an open letter urging Tesla and CEO Elon Musk to avoid investing in Indonesia's nickel mining industry, citing concerns over environmental destruction and harm to indigenous communities. The letter follows a May meeting between Musk and Indonesian President Joko Widodo, where the two reportedly discussed potential Tesla investment in the country's nickel sector, according to Bloomberg.
The letter states that Indonesia's nickel industry "has a record of environmental damage, criminalization threats that abuse democracy and equity, the threats to the vulnerable groups, and multiple violations of law." It warns that nickel mining has caused and will continue to cause mass deforestation, water pollution, and the criminalization of indigenous peoples defending their land.
Nickel is a key component in electric vehicle batteries, including those used in Tesla vehicles. It improves battery storage capacity, addressing a major concern for the EV industry. Musk has previously called on nickel producers to increase output, saying in a 2020 conference call that "Tesla will give you a giant contract for a long period of time if you mine nickel efficiently and in an environmentally sensitive way."
Whether Musk will heed the letter's request remains uncertain. The global race to dominate the EV market has driven up demand for battery raw materials, including nickel, causing component costs to surge and threatening the industry's growth. Musk is not alone in pushing for expanded mining: Ford's CEO told CNBC in May that bringing more EVs to market requires mining permits and cooperation between government and the private sector.
Musk has built a public reputation as a climate advocate, though the letter's signatories argue that nickel mining in Indonesia contradicts those stated priorities. The coalition's appeal adds pressure as Tesla weighs its supply chain options amid a tightening market for battery metals.
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