Volvo is to become the world's first car manufacturer to utilise blockchain technology to ensure global traceability of the cobalt it uses in its EV batteries. Blockchain is one of the most secure and accurate ways of tracking transactions, meaning that from production to public sale, Volvo will know its cobalt meets stringent ethical and sustainability standards.
Cobalt itself has come under intense scrutiny of late thanks to the fact that in some African nations where it originates there is a dark underbelly to the mining business. Whilst it is increasingly mined properly with appropriate safety and environmental standards, a large amount of the precious material comes into the market from unofficial sources. These are often dangerous, dirty and – in some cases – using child labour.
To avoid buying from unsavoury sources and perpetuating these issues, manufacturers are cleaning up their act. BMW has already changed its processes to only buy cobalt from reputable sources, but Volvo's project goes several steps further.
The way blockchain works means that both Volvo itself and buyers of electrified Volvos – from this year – can be absolutely certain that the cobalt is sustainable and ethically sourced. Partnering with leading blockchain firms and battery suppliers, CATL and LG (which themselves have blockchain-based traceability), finishes the puzzle from mine to showroom.
For those unfamiliar with blockchain, it's a tricky thing to explain but isn't actually as complicated as it sounds. A blockchain is essentially a digital ledger containing a list of records linked to each other via cryptography – i.e. a code. 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.
Think of it like the codes and cyphers used in World War Two where only the people with the knowledge of the code itself, and the key with which to transcribe it, can benefit from the contents of the message.
In Volvo's case, the message is a traceable history of the cobalt it is using including the weight, size, who has handled it and whether that handling is consistent with The Organisation for Economic Co-operation and Development (OECD) guidelines – which ensure ethical sourcing.
“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 minimising any related risks, in close collaboration with our suppliers.”
Batteries for CATL and LG will be used in Volvo and Polestar's future range of electrified cars including the recently launched XC40 Recharge EV, Volvo's PHEVs as well as the Polestar 1 PHEV and Polestar 2 performance EV.