Electric vehicle batteries require cobalt.
Most cobalt comes from mines in the Democratic Republic of Congo.
Congo is a nation plagued by instability and a lack of rule of law that allows some mining companies to exploit their workers.
Welcome to the challenge of auto industry supply chain ethics.
Supplier disruptions caused by the pandemic are being amplified by concerns about how to ethically source critical automotive materials.
The drive has given a new urgency to supply chain transparency. But the work is both labor-intensive and unreliable. Automakers and many Tier 1 parts makers have been trying to peel back the layers of their parts and material sourcing for nearly a decade, especially since a combined earthquake and tsunami in Japan made getting some key materials impossible.
"We have gone through every step of the supply chain to the cobalt mine to make sure it's ethically correct," Volvo procurement boss Martina Buchhauser said in an online presentation during last month's Financial Times Digital Future of the Car summit. "But what we were missing was a technological way of tracing and putting a ledger on it. And making sure it can't be fiddled with after the fact."
In light of the COVID-19 pandemic, Volvo aims to widen this transparency to other parts of its supply chain. "If something happens again," Buchhauser said, "it would be good to have more visibility in the supply chain."
Volvo also wants more insight into the ethical sourcing of all of its other parts, and to be able to track its CO2 footprint across the entire supply chain.
"At our heart is safety and sustainability, and responsible sourcing and CO2 footprint are a big part of that," Buchhauser said. "At first it was a bit funny, because everyone was like, 'Oh, you really mean this?' Now our suppliers are well educated and want the same things."
To monitor the origins of their supply of cobalt, both Volvo and Daimler are working with the U.K.-based startup Circulor, a company that tracks vast amounts of purchasing and logistics data in a process referred to as blockchain.
Such supply chain analytics have been around for a while, with companies such as ELM Analytics and Resilinc offering to map chains down through all tiers of suppliers. The data is becoming increasingly valuable as automakers and suppliers try to protect themselves from surprise source shutdowns.
But identifying every tier is an impossible task, said Ian Harnett, who spoke at the summit just before retiring at the end of July from his position as Jaguar Land Rover's purchasing chief.
"I would love to know everything all the way down," he said. "But, realistically, I would need an army of people. I would need supercomputers. And the first time a Tier 4 supplier changed one of its Tier 5 suppliers the data is of no use anymore."
Worse, it is unclear whether possessing all that data would truly change anything — other than where it concerned conflict materials, such as cobalt.
Harnett gave the example of the shiny pigment known as Xirallic, which is used universally in metallic paints and is produced solely in Japan.
Xirallic production crashed with the 2011 Japan earthquake and tsunami, halting the output of many vehicles in the U.S.
"None of us knew what it was," he said of Xirallic. Yet little has changed, he said. "Even after all this time, there's still only one place in the world that makes it."