Volvo turns to blockchain to check EV batteries are responsibly sourced

Cobalt, a key battery material, is often sourced in problematic ways — Volvo wants to change that with technology.

Electric vehicles promise zero tailpipe emissions, but there are dirtier factors that are easily forgotten. Batteries require rare-earth materials and, sometimes, suppliers don’t source them in the most responsible way. Volvo, on Wednesday, detailed how it will start to change that.

Any cobalt Volvo uses for its electric-car batteries will be tied to blockchaintechnology, thus starting a digital ledger to keep tabs on where and how suppliers sourced the material. Both of the Swedish luxury brand’s battery suppliers, LG Chem of South Korea and CATL of China, agreed to implementing the blockchain to trace cobalt sourcing.

For those in need of a blockchain crash course , here you go: Blockchains are digital ledgers that cannot be changed without alerting another party. The records are linked to each other via written code. Along a supply chain, like cobalt for batteries, suppliers will create records of transactions that also create a set of data-recording rules. Those who are part of the blockchain can independently verify any transaction and tampering is theoretically impossible.

With the agreements and blockchain in place, Volvo will be able to trace the cobalt’s origin, weight, size and see who handled it and in what fashion along the way. Four different companies will operate the blockchain tied to Volvo’s battery-sourcing needs for both CATL and LG Chem, the company added.

The blockchain will certainly help provide transparency around cobalt sourcing. The Democratic Republic of Congo is home to about half of the world’s cobalt supply, and more often than not, the country turns to child labor to meet demand. Poor working conditions are common in the mines as well.

BMW has also worked to combat this issue, and in 2017, promised to provide better transparency into its battery-cell supply chain. This included setting up BMW-sponsored cobalt mines with better working conditions to set a standard for others to follow.

Volvo’s latest agreement comes as it revs up its electric-car portfolio. Its first EV, the XC40 Recharge, will launch at the end of 2020. Additional Volvo EVs, and Polestar EVs, remain in the pipeline.