KOLKATA: Volvo Cars will become the first carmaker to implement global
traceability of cobalt used in its batteries by applying blockchain technology.
The announcement follows the reveal last month of the company’s first fully
electric car, the XC40 Recharge.
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 is 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.
Volvo Cars has now 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.
“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.”
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, a Volvo car spokesperson on Wednesday said.
In this particular case, 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 Cars last month launched the XC40 Recharge, the first of an upcoming
family of fully electric cars under the Recharge banner. By 2025, it expects half
of its global sales to consist of fully electric cars, with the rest hybrids.
Last month, Volvo Cars also launched an ambitious climate plan, which
includes a radical reduction of carbon emissions by 40 per cent per vehicle by
2025, as well as a continued commitment to ethical business across its entire
operations and supply chain.
CATL and LG Chem are renowned battery manufacturers, both with long
and successful track records supplying lithium ion batteries to the global
automotive industry. They fulfill Volvo Cars’ strict sourcingguidelines in terms
of technology leadership, responsible supply chains, reduction of carbon
emissions and competitive cost models.
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 XC40 Recharge.
(agencies)
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