While electric vehicles (EVs) are taking center stage, a significant hurdle stands in the way of a cleaner future: the complex and opaque supply chain. Last month, the Biden administration announced ambitious regulations to boost EV adoption, with a requirement that at least 54% of all new U.S. vehicles be electric by 2030. As we work towards this goal, a blockchain solution is not only a necessity but also the key to creating transparency and guaranteeing human rights throughout the entire EV supply chain.
Dr. Qichao Hu, founder and CEO of SES AI, a Li-Metal EV battery manufacturer, believes that we need a comprehensive and transparent system for tracking EV production. Currently, car parts, including batteries, are extracted, manufactured, and assembled across several continents before reaching their final destination. This presents a huge challenge for regulators seeking to enforce sustainable practices and establish end-to-end infrastructure in the United States and other countries.
Blockchain technology can provide the platform needed to achieve this transparency, ensuring that every transaction from mining to manufacturing is recorded and verified by multiple parties. Not only does this help eliminate unethical sourcing and smuggling, but it also raises the bar for quality control, as some electric vehicles have experienced battery fires due to poor production processes.
This revolutionary technology has already seen real-world applications, with companies like De Beers embracing blockchain to bring transparency to the diamond trade. Additionally, the World Economic Forum has introduced a project called “Redesigning Trust with Blockchain in the Supply Chain,” partnering with over 100 organizations to develop an open-source toolkit for streamlining blockchain deployment.
Such projects can serve as inspiration for emerging EV supply chains, allowing consumers and regulators to trust that companies receiving government subsidies are fulfilling their obligations, whether it’s generating clean energy or ensuring safety measures.
Moreover, blockchain’s tokenization capabilities have the potential to open up new markets related to ethical sourcing and transparent supply chains in the EV sector. With the shift towards digital assets backed by real-world commodities, stablecoin projects like Paxos are being linked to precious metals such as gold. Other raw materials essential to the EV industry, like lithium, could follow suit.
To achieve widespread adoption and adherence to ethical sourcing, we need a complete overhaul of our domestic and international supply chains. Fortunately, the Biden administration’s regulatory push is just the kind of green light needed to kickstart this transformation. Blockchain technology can build the much-needed data-backed trust and transparency, setting the stage for a sustainable and ethical EV revolution in the years to come.
Source: Coindesk
