Volvo has made an investment in blockchain technology firm Circulor through the Volvo Cars Tech Fund, the company’s venture capital investment arm.
Circulor and Volvo have been working together in recent years on the implementation of blockchain technology to boost the traceability of cobalt used in the batteries of its electric cars.
Circulor’s blockchain technology is today used throughout Volvo’s battery supply chain, which will achieve 100% traceability of cobalt used in the XC40 Recharge P8, its first fully electric car. Production of the XC40 Recharge P8 will start later this year in Ghent, Belgium.
The investment in Circulor by Volvo allows both companies to expand their focus beyond cobalt, for example by looking at increasing traceability of mica, a mineral used as isolation material in the battery pack of electric Volvos.
Volvo and Circulor are also investigating the possibility to expand their blockchain technology cooperation to other areas, for example tracking and reducing CO2 footprints, helping Circulor to potentially set standards for ethical sourcing in automotive and other industries.
The investment by the Volvo Cars Tech Fund is part of a funding round by Circulor, which also involves three other investors: SYSTEMIQ, Total Carbon Neutrality Ventures and Plug & Play.
“We are committed to an ethical supply chain for our raw materials, and our partnership with Circulor has been instrumental in that regard,” said Martina Buchhauser, Chief Procurement Officer at Volvo Cars. “By supporting Circulor’s ongoing development we can expand the use of blockchain technology in our operations and contribute to a more sustainable business.”
Volvo was the first car maker to implement global traceability of cobalt used in its batteries by applying blockchain technology across its supply chain. The technology developed by Circulor is implemented in partnership with CATL and LG Chem, Volvo’s battery supply partners.
CATL and LG Chem are renowned battery manufacturers with long and successful track records supplying lithium-ion batteries to the global automotive industry. They fulfil Volvo’s strict sourcing guidelines in terms of technology leadership, responsible supply chains, reduction of carbon emissions and competitive cost models.
The agreements between Volvo, CATL and LG Chem cover the supply of batteries over the coming decade for next-generation Volvo and Polestar models, including the XC40 Recharge P8.
The Volvo Cars Tech Fund was launched in 2018 and invests in high-potential technology start-ups around the globe. It focuses its investments on strategic technology trends transforming the auto industry, such as artificial intelligence, electrification, autonomous driving and digital mobility.