Traceability of raw materials used in the production of lithium ion batteries, such as cobalt, is one of the main sustainability challenges faced by car makers. Volvo Cars asserts to be committed to full traceability, ensuring that customers can drive electrified Volvos knowing the material for the batteries has been sourced responsibly.
Blockchain technology, which establishes a transparent and reliable shared data network, significantly boosts transparency of the raw material supply chain as the information about the material’s origin cannot be changed undetected. Towards this end, Volvo has reached an agreement with its two global battery suppliers, CATL of China and LG Chem of South Korea, and leading global blockchain technology firms to implement traceability of cobalt starting this year.
Technology firms Circulor and Oracle operate the blockchain technology across CATL’s supply chain following a successful pilot earlier this summer, while the Responsible Sourcing Blockchain Network (RSBN), together with responsible sourcing specialists RCS Global and IBM, is rolling out the technology in LG Chem’s supply chain.
A blockchain is a digital ledger containing a list of records linked to each other via cryptography. Within supply chains, the technology creates records of transactions which cannot be changed, while also enforcing a common set of rules for what data can be recorded. This allows participants to verify and audit transactions independently.
In the particular case at hand, data in the blockchain include the cobalt’s origin, attributes such as weight and size, the chain of custody and information establishing that participants’ behavior is consistent with OECD supply chain guidelines. This approach helps create trust between participants along a supply chain, Volvo is convinced.
The agreements between Volvo Cars, CATL and LG Chem cover the supply of batteries over the coming decade for next generation Volvo and Polestar models, including the new XC40 Recharge model.