2024-08-23
According to a report by Reuters, Volvo is set to introduce the world’s first electric vehicle battery passport, which will document the raw material sources, components, recycled material content, and carbon footprint of the EX90 flagship model’s battery. This innovative initiative highlights Volvo's leadership in supply chain transparency and sustainability.
Volvo has partnered with the UK-based blockchain startup Circulor, spending five years developing the battery passport. Circulor leverages blockchain technology to map the full scope of the battery supply chain, ensuring that data is accurately recorded at every key node. This technology not only helps trace the origins of raw materials but also enhances the efficiency and transparency of supply chain management—one of the major challenges faced by multinational corporations in foreign trade.
Proactively Responding to International Regulations, Strengthening Competitiveness in Foreign Trade
Starting from February 2027, the European Union will require all electric vehicles sold in its market to be equipped with a battery passport that discloses the battery components’ origins, carbon footprint, and recycled material content. However, Volvo’s global sustainability chief, Vanesasa Butani, stated that Volvo plans to launch this passport nearly three years ahead of the EU regulation’s enforcement. This move not only aligns with regulatory requirements but also demonstrates Volvo’s commitment to global market responsibility. By positioning itself ahead of regulatory deadlines, Volvo strengthens its competitiveness in international markets as a leader in sustainability.
A Model for Supply Chain Management and Cross-Border Cooperation
The EX90 model equipped with a battery passport will begin production later this year at Volvo’s plant in Charleston, South Carolina, and will be delivered to consumers in Europe and North America. By utilizing blockchain technology, Volvo can provide consumers from different countries with transparent supply chain data, enhancing their trust in the product's origins. This transparent supply chain management model, particularly in international markets, effectively reduces compliance risks in cross-border transactions and boosts the company’s brand image.
Circulor CEO Douglass Johnson-Poensgen highlighted that the battery passport will also include the latest information on battery health, with a validity of 15 years and a cost of around $10 per vehicle. This detailed tracking of information not only meets the regulatory requirements of various countries but also helps Volvo maintain efficient partnerships with its global suppliers. Especially in the context of increasingly complex global logistics and supply chains, this innovation will significantly enhance the traceability and transparency of Volvo's supply chain.
First-Mover Advantage in the International Market
Through the battery passport project, Volvo has successfully demonstrated its adaptability to global markets. While the U.S. has not yet implemented similar battery passport regulations like the EU, the Inflation Reduction Act is driving American manufacturers to explore this technology to ensure they meet future subsidy requirements.
From a foreign trade perspective, Volvo's battery passport is not just a technological innovation but a vital part of its global strategy. It effectively addresses the issue of supply chain transparency in international markets, ensuring that Volvo maintains a competitive edge in cross-border trade. As global environmental regulations become increasingly stringent, Volvo’s initiative is likely to set a new benchmark for the future of international trade.
