A long exposure picture shows cars of Swedish automobile manufacturer Volvo displayed in front of a showroom of Stierli Automobile AG company in St. Erhard, Switzerland April 11, 2019. REUTERS/Arnd Wiegmann/Files
STOCKHOLM (Reuters) – Volvo Cars said on Wednesday it will make the cobalt used in its batteries globally traceable using blockchain technology, following an agreement with its two battery suppliers, China’s CATL and South Korea’s LG Chem.
Volvo, owned by China’s Geely Holding, has lined up deals with CATL and LG Chem covering the battery supply over the coming decade for next generation Volvo and Polestar models, including the recently launched electric model XC40 Recharge.
Carmakers, under pressure to show electric vehicle batteries are sourced responsibly, are exploring the usefulness of blockchain – the immutable ledger technology – to improve scrutiny of supply chains and show sourcing does not rely on conflict minerals or child labour.
“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 Cars head of procurement, Martina Buchhauser, said in a statement.
Cobalt is in high demand as it is a key mineral for making lithium-ion batteries, but governance is particularly challenging as the majority of all supplies are from the Democratic Republic of Congo.
The Gothenburg-based carmaker said blockchain specialist Circulor and tech firm Oracle operated the blockchain technology across CATL’s supply chain following a successful pilot earlier this summer.
The Responsible Sourcing Blockchain Network (RSBN), together with RCS Global and IBM, are rolling out the technology in LG Chem’s supply chain.
The data covered in the blockchain included the cobalt’s origin, size and weight, as well as the chain of custody and information establishing that participants in the supply chain showed behaviour consistent with OECD guidelines, Volvo said.
The carmaker has initially focused primarily on securing a responsible and transparent supply chain for cobalt as well as tin, tungsten, tantalum and gold by 2020, but plans to apply blockchain tracking to key materials such as lithium and nickel in the future.
Reporting by Johannes Hellstrom; editing by Niklas Pollard