In a significant announcement by Volvo Cars, the Cobalt used in the production of Volvo’s electric car batteries will now be traced using blockchain methods. The announcement follows the unveiling last month of the company’s first fully electric car, the XC40 Recharge, the first of an upcoming family of fully electric cars under the Recharge banner. According to our local Volvo dealer, Volvo Cars of North Miami, by 2025, Volvo expects half of its global sales to consist of fully electric cars (EVs), with the rest being hybrids.
The traceability of the raw materials used in the production of lithium-ion car batteries is one of the main challenges faced by today’s electric car makers. The issue at hand is supply chain responsibility. At the present time, more than 50% of the world’s cobalt supply originates in the Democratic Republic of the Congo (DRC). A significant percentage (almost 20%) of the cobalt mining in the DRC is done by small operations. While this fact does not present issues itself, the makeup of the labor force and practices employed by these miners can. Many examples have come to light of poor working conditions, insufficient mining equipment, and child labor exploitation. These supply chain safety issues when combined with the general political instability in the DRC are leading to international concern about safety and general working conditions.
A blockchain is a digital ledger containing a list of sourcing records linked to each other via secure techniques. The technology involved creates records of transactions that cannot be changed. This allows participants to verify and audit all transactions independently so that material sourcing becomes 100% transparent to any that examines it.
In the case of Cobalt, the data in the blockchain include the location of the cobalt’s origin, attributes such as weight and size, and all the transactional steps that the material goes through in making its way to market. This data is critical to establishing that supply chain participants’ behavior is consistent with international supply chain guidelines. This is especially important to Volvo as Volvo Cars is committed to full traceability. This ensures that customers can drive electrified Volvos knowing the material for the batteries has been sourced responsibly.
CATL and LG Chem Suppliers
Volvo Cars has forced a relationship with two global battery suppliers, CATL of China and LG Chem of South Korea, and two leading blockchain technology firms, Circulor and Oracle, to implement traceability of cobalt starting this year.
A process that extends to other raw materials
“We have always been committed to an ethical supply chain for our raw materials,” said Martina Buchhauser, head of procurement at Volvo Cars. “With blockchain technology, we can take the next step towards ensuring full traceability of our supply chain and minimizing any related risks, in close collaboration with our suppliers.”