- Volvo emerges as the first car manufacturer to implement blockchain technology
- A blockchain is a digital ledger containing a list of records linked to each other via cryptography
- In this case, data in the blockchain includes the cobalt’s origin along with its weight and size
Swedish car manufacturer, Volvo claims to be the first car manufacturer to implement global traceability of cobalt used in its batteries by applying blockchain technology. The new announcement comes at a time when the company has introduced its first fully electric car, the XC40 Recharge. Volvo further states that 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.
For the uninitiated, 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 this particular case, data in the blockchain includes the cobalt’s origin, attributes such as weight and size, the chain of custody and information establishing that the participants’ behaviour is consistent with OECD supply chain guidelines.
The blockchain technology establishes a transparent and reliable shared data network. Volvo cars claim that the technology significantly boosts transparency of the raw material supply chain as the information about the material’s origin cannot be changed undetected. The company has reportedly entered into an agreement with 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, 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.
Speaking on the occasion, Martina Buchhauser, Head of Procurement at Volvo Cars, said, “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.”
