Volvo has reached an agreement with its two battery suppliers, namely China-based CATL and South Korea-based LG Chem.
However, Volvo explains:
“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.”
As part of the deal, the two suppliers will cover Volvo’s battery which needs for the production of new Volvo and Polestar models over the next decade and record the required raw materials using blockchain technology.
Proud to be establishing a new benchmark for responsible sourcing https://t.co/L8MQ4GqSKA — Circulor (@Circulor1) November 6, 2019
With the initiative, Volvo is trying to prove that the materials used in the batteries of its electric vehicles are extracted without taking advantage of child labor and come from conflict-free zones.
“With blockchain technology we can take the next step towards ensuring full traceability of our supply chain and minimizing any related risks, in close collaboration with our suppliers.” Martina Buchhauser
Volvo Cars to trace battery cobalt using blockchain technology | Article [AMP] | Reuters https://t.co/1CbioVw7IQ — Circulor (@Circulor1) November 6, 2019
Similarly, the data stored on-chain includes the cobalt’s origin, size, weight, chain of custody and information concerning whether the organizations involved respected the guidelines wrote by the Organization for Economic Cooperation and Development.
Thus, the news comes as blockchain technology is being increasingly adopted in global supply chain traceability.