Tesla Inc TSLA revealed that it was working with a consortium of cobalt producers to develop a blockchain platform to track the commodity from “mine to the battery.”
What Happened: The Elon Musk-led company said in its recently-released 2020 Impact Report that it is working the Democratic Republic of Congo-centric Re|Source consortium — made up of China Molybdenum Co., Ltd CMCLF, Eurasian Resources Group, and Glencore plc GLNCY GLCNF — on the blockchain platform.
The platform aims to create a “transparent, open and global registry” that will track cobalt to ensure its sustainability and help in the tracking of its provenance at the unit level.
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“The system will allow users to fully track cobalt from the mine to the battery with assurance that the volume of traceable material is understood as well as the sustainability efforts of upstream suppliers,” said Tesla.
The electric vehicle maker said it is participating in the pilot of the platform, which is scheduled to run until the end of 2021. Full rollout is expected in 2022.
Why It Matters: Tesla revealed that the pilot is being executed in “real operating conditions,” from cobalt production sites in the DRC all the way through to electric vehicle production.
Cobalt is an important ingredient in the production of lithium-ion batteries but its extraction in the DRC often involves child labor.
Tesla rival Ford Motor Company F was reported to be working with partners on a blockchain pilot last year to track the cobalt it uses.
Blockchain, the same technology that powers cryptocurrencies like Bitcoin BTC/USD and Dogecoin DOGE/USD, is akin to an open ledger that can be used to increase transparency in the cobalt supply chain.
Musk often tweets on cryptocurrencies and his social media commentary has at times moved the prices of both Bitcoin and Dogecoin.
Price Action: On Tuesday, Tesla shares closed 2.98% lower at $665.71 and fell almost 0.4% in the after-hours trading.
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