Volvo Cars

Blockchain technology optimises traceability

Volvo Cars creates mobility solutions that aim to bring back the freedom to move in a safe, sustainable and personal way.

The electrification of vehicles presents sustainability challenges. One of the most pressing is traceability of the raw materials used in the production of lithium-ion batteries, in particular cobalt. With this in mind, Volvo Cars became the first carmaker to implement blockchain technology across its entire cobalt supply chain.  

Blockchain technology, which establishes a transparent and reliable shared data network, significantly boosts transparency of the raw material supply chain by ensuring that information about a material’s origin cannot be changed undetected. To achieve this and implement global traceability of its cobalt supply, Volvo Cars has worked closely with its two global battery suppliers, CATL of China and LG Chem of South Korea, as well as leading global blockchain technology firms.

So how does this system work? Quite simply, 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 the case of cobalt, data in the blockchain include the material’s origin, attributes such as weight and size, the chain of custody, and information establishing that participants’ behaviour is consistent with OECD supply chain guidelines. This approach helps create trust and encourages cooperation between supply chain participants. By striving towards full traceability, Volvo Cars aims to ensure that their customers can drive electrified Volvos knowing the material for the batteries has been sourced responsibly.

Volvo Cars has 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. Together with the introduction of blockchain technology, the company is taking a leading role in creating the safe, sustainable mobility solutions that will define our future.

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