Volvo Cars has entered into agreements with its two major global battery suppliers, China-based CATL and South Korea’s LG Chem, to introduce blockchain-based traceability for cobalt used in electric vehicle batteries. The initiative is scheduled to begin this year and is aimed at improving transparency across the supply chain for a critical battery material.
The automaker is set to become the first car manufacturer to implement global cobalt traceability using blockchain technology. The system will track cobalt used in lithium-ion batteries installed in Volvo’s electric vehicles, providing information about the material’s origin and movement through the supply chain.
Volvo Cars plans to use blockchain to create a traceable record of cobalt from its source through the battery supply chain, helping customers gain greater confidence that materials used in its electric vehicles are responsibly sourced.
Blockchain technology can establish a shared data network among participants in the supply chain, allowing relevant information to be recorded and accessed by authorized parties. Because entries on the blockchain are designed to be resistant to undetected changes, the technology can help strengthen the reliability of information concerning the origin and handling of raw materials.
Cobalt sourcing remains a major industry challenge
Responsible sourcing of cobalt has become an important sustainability issue for automakers as demand for electric vehicles and lithium-ion batteries increases. Cobalt is a key component in several battery chemistries, while concerns surrounding its sourcing have encouraged manufacturers to seek greater visibility into where and how the material is obtained.
Volvo Cars said the initiative was part of its broader effort to establish an ethical and transparent raw-material supply chain. Martina Buchhauser, the company’s head of procurement, said Volvo had long focused on responsible sourcing and viewed blockchain as an opportunity to improve traceability and reduce supply-chain risks through closer cooperation with its suppliers.
The initiative involves different technology and responsible-sourcing organizations working with Volvo’s battery suppliers.
For CATL’s supply chain, blockchain technology is being operated by Circulor and Oracle after a successful pilot program conducted earlier in the year. The system is intended to provide greater visibility into cobalt as it moves through the relevant stages of the supply chain.
For LG Chem, the Responsible Sourcing Blockchain Network is working with responsible-sourcing specialists RCS Global and IBM to deploy similar technology across the supplier’s supply chain. The separate initiatives are designed to provide traceability while supporting responsible sourcing practices among the companies involved.
Volvo expands its electric vehicle strategy
The blockchain initiative comes as Volvo Cars accelerates its transition toward electrified vehicles. The company recently introduced the XC40 Recharge, its first fully electric model under the Recharge product family, as it prepares to expand its electric vehicle lineup.
Volvo Cars has set an objective of having fully electric vehicles account for half of its global sales by 2025, with the remainder expected to come from hybrid vehicles. The automaker has also established a target of reducing carbon emissions per vehicle by 40 percent by the same year.
By linking battery-material sourcing with blockchain-based traceability, Volvo is seeking to address supply-chain transparency alongside its wider targets for electrification and emissions reduction.
The move highlights how automakers are increasingly looking beyond vehicle design and powertrain technology to improve the sustainability of materials used in electric cars. Greater visibility into cobalt sourcing could also provide manufacturers with stronger tools for identifying supply-chain risks and demonstrating responsible procurement practices.
For Volvo, the initiative represents an effort to combine its electric vehicle expansion with greater accountability for the raw materials supporting that transition. As demand for battery-powered vehicles grows, technologies capable of tracking critical materials could become an increasingly important part of efforts to build more transparent and sustainable automotive supply chains.