Swedish car manufacturer Volvo has announced that it will be leveraging blockchain technology to improve traceability of the cobalt used in the company’s car batteries.
In 2017, Volvo shared that every car launched from 2019 onwards will either be a hybrid or fully electric vehicle (EV) as part of its commitment to reducing carbon emissions.
However, some of the rarer elements used in EV batteries, such as cobalt, are procured using environmentally unsustainable practices – or in some cases, using child labour. In an attempt to eliminate these practices, Volvo will be using blockchain technology to trace its battery supply chain.
According to a recent press release, Volvo will be working alongside battery manufacturers CATL and LG Chem, both of whom are major producers of lithium-ion vehicle batteries.
Volvo has committed to working with these battery producers for the next decade to deliver traceable and sustainable batteries for the company’s XC40 Recharge models and its premium Polestar range.
Leveraging blockchain technology
Volvo explained that as blockchain provides a transparent and reliable network of shared data, it can be used to increase the transparency of the raw material supply chain. This is due to the immutable nature of blockchain, which makes information about the material’s origin tamper-proof.
Powering the blockchain architecture behind Volvo’s supply chain tracking are technology firms Circulor, Oracle, and IBM. After a successful pilot earlier this year, Oracle and Circulor will be deploying blockchain solutions across CATL’s supply chain, while IBM will be responsible for implementing the technology within LG Chem’s supply chain.
Commenting on Volvo’s innovative use of blockchain, Martina Buchhauser, head of procurement at Volvo Cars, explained:
“We have always been committed to an ethical supply chain for our raw materials. With blockchain technology, we can take the next step towards ensuring full traceability of our supply chain and minimising any related risks, in close collaboration with our suppliers.”
Volvo will be using blockchain data to store information on the cobalt’s origin and its physical attributes such as weight and size, as well as to track chain-of-custody information. This will allow Volvo to verify that the work practices of the company’s suppliers are in keeping with OECD guidelines for a sustainable supply chain.
The plans come after Volvo announced that by 2025, the manufacturer will be reducing carbon emissions from its vehicles by 40%. Volvo expects that in this time, over half of its global sales will be full-electric vehicles.
To learn more about blockchain-based supply chain tracking, read our research review here.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.