As ESG pressure rises in an industry critical to the EV revolution, environmental organizations urged Tesla Inc. on Monday to reconsider its plans for nickel investment in Indonesia, the world’s largest material producer.
Hundreds of organizations urged Tesla CEO Elon Musk and shareholders in an open letter to cancel direct investment plans in Indonesia’s nickel sector and prohibit nickel obtained and produced in the nation from being used in Tesla vehicles.
The letter from non-governmental organizations such as Wahana Lingkungan Hidup Indonesia (WALHI) and Friends of the Earth United States comes after Indonesian President Joko Widodo met with Musk in Texas in May to discuss future investments.
Indonesia has the world’s largest nickel reserves, and Widodo is eager to establish a domestic nickel-based EV sector. To assure supplies for investors, the government banned the export of unprocessed nickel ore beginning in 2020.
Environmentalists, however, are concerned that the procedure will involve the disposal of mining waste into the ocean.
The NGOs stated in the letter that the overall area of the forest converted to nickel mining causes increased deforestation and the hazard of polluted water in the river, lake, and beach.
The organization encouraged Tesla to cancel any future direct investment plans in the Indonesian nickel industry and to discontinue using nickel supplied and produced in Indonesia in all of its business lines.
Musk asked the mining industry to produce more nickel “in an environmentally sensitive manner” in 2020, calling US nickel output “objectively very lame.”
Nickel used to enhance battery storage is projected to witness a demand increase in the coming years as governments, businesses, and consumers work to reduce toxic gases released by fossil-fueled vehicles.