Today’s vehicles are evolving toward becoming more than a mode of transport. The 21st-century cars are moving data centers with onboard sensors and computers that capture information about the vehicle. More secure, traceable transactions, better access to the transparency of information, and blockchain have the potential to strengthen trust and collaboration among businesses, consumers, and even vehicles. Blockchain in automotive industry will likely become indispensable to make next-generation cars a reality in the coming years.
Read ahead to know what blockchain has in store for the automotive industry.
The new mobility models that are being studied and implemented involve increasing the use of data and information, leading these systems, which can be defined as smart, to become increasingly complex and critical. The automotive sector has realized that, by now, the concept of ownership has become completely “liquid,” and there is no longer interest in the product “car” but the mobility service.
Let us know your requirements!
However, this new paradigm implicitly provides some problems:
The DLT (Distributed Ledger Technology) and, specifically, blockchain fit comfortably into the data and information system in mobility models, becoming an essential tool for this constantly evolving industry. The blockchain for vehicle service ensures that the data entered in the ledger, the main transaction’s database is, as well as safe and traceable also immutable, ensuring that critical transactions such as those of software installation on the car or the tracking of certified spare parts or the management of litigation by accident are managed, tracked and archived in a simple and searchable way. Each blockchain transaction must be validated by more than half the chain participants. This makes the entire network completely transparent and highly secure.
The use cases of blockchain in automotive industry and manufacturing sectors of the automobile industry include
Supply chain monitoring for greater transparency: Even a small fluctuation at the retail level can cause a large fluctuation at the distributor and manufacturer levels. This is called as Bullwhip Effect. Complex, cross-constituency supply chains to monitor delays and sourcing constraints impact production and profitability. For example, Renault has invested heavily in driving digital transformation. The car company has opted to use blockchain technology for its supply chain needs.
Automotive Blockchain Market is projected to grow from USD 0.35 million in 2020 to USD 5.29 million in 2030, at a CAGR of 31.19% during the forecasted period.
Materials provenance and counterfeit detection: The tracking mechanism in the blockchain is transparent to every single change made to the original information. This way, authorized viewers can verify legitimacy. Blockchain in automotive industry helps in tracking the source of materials used in car manufacturing as far as from its first origin. This way, no one gets left out of the supply chain. Counterfeiting is a bigger issue than we realize. The World Trade Mark cited that by 2022, the current $4.2 trillion impact of counterfeiting and piracy will be reduced from the global economy.
Engineering design high-complexity products: Delays in sharing updated engineering specifications or parts supersessions can increase rework and delay final delivery (e.g., car, bus). Blockchain helps share newer engineering designs and solutions across the industry so that no extra time is spent to develop high-complexity products. For example, the Mobility Open Blockchain Initiative (MOBI) is a non-profit focused on accelerating adoption and promoting standards in the automotive and mobility industries.
Identity management: Identity and Acess Management is rising to be one of blockchain’s most important use cases. It is important to know who is taking action and their credentials, including attorneys, auditors, engineers, and technicians. Identity management using blockchain will be beneficial to both car owners and manufacturers.
Quality assurance: Using blockchain, people look across a product life cycle to gauge qualifications, quality, patterns of defects, etc. This is especially helpful in car reselling. A second-hand car buyer can ensure that the previous owner’s car is well-maintained, passes all the quality tests, and is free of defects.
Blockchain-powered solutions can seamlessly aggregate this information, delivering significant value for industrial companies. They can also help unlock the full potential of other advanced technologies like augmented reality, 3D printing, AI, and IoT. The possibilities of transformation with blockchain for vehicles are endless. This brings us to a newer concept, that is, mobility-as-a-service. It is a shift from personally owned modes of transportation towards channels providing mobility-as-a-service. Let’s look into the role of blockchain in shared modes of transportation.
The residents of Helsinki have been able to access public and private modes of transportation in their city with an app called Whim. They can book a train, bus, taxi, carpool, or bike-share. People can enter a destination and their preferred mode of transportation to get there. If a single mode of transport cannot get them to their destination, they can choose modes that cover door-to-door journeys. There is a pay-and-go system as well as a monthly subscription system.
Contact us for a no-obligation consultation
What the Whim app does in Helsinki is Mobility-as-a-Service (MaaS). The goal is to make public transport appealing by converting it into an on-demand service.
The definition of MaaS is fulfilled by explaining these 3 components:
Cities have multiple mobility options. MaaS is an organized structure to bring together all the mobility services under one roof, often in the form of a smartphone app.
Blockchain-based ecosystems, such as the Mobility Blockchain Platform, provide fully secure transaction networks reducing the need for intermediaries or aggregators. It facilitates end-to-end, or door-to-door mobility billed on completely decentralized transaction networks. The peer-to-peer and end-to-end architecture empowers smaller stakeholders who otherwise get sunken in the hustle and bustle of transport systems.
Using blockchain, multiple independent mobility and service providers can combine their solutions into multi-stage, multi-mode, and multi-operator offerings. End-users benefit from the service depth and the smoothness of the customer journey, while operators can bundle products that would be beyond their capacity for service delivery and marketing. Blockchain also helps in keeping records of automobiles and travelers.
Some fundamental features of MBP include
Access: The blockchain enables standardized, open-source protocols and APIs to interconnect capabilities and services. This way, car dealers can access cross-network resources and services.
Verification: Using blockchain, a standardized, open-source verification process can be conducted to verify the identity credentials of participating companies, equipment, or assets. The verification methods can also be used for identity management.
Discovery: Discovery in MBP is present as a request and offer mechanism for allocating available services, enabling network participants to dynamically access and check the availability of services offered on the network.
Contracting: Contracting involves managing the contract-signing procedure to ensure the legalization of smart, digital contracts.
Settlement: The shared ledger helps settlement and other payment requirements by correct cross-party booking of liabilities into the shared ledger.
Car owners benefit from blockchain-based services in numerous ways. This can be in the form of rewards, which drives customer engagement, retention, and additional revenue across various sectors. Other benefits of blockchain for customers include tokenizing aspects such as carbon credit and vehicle sound. Passports, payments, and wallets can also be digitized, providing a valuable add-on to infotainment technology by ensuring in-car payments for movies, apps, and other services.
A vehicle’s amount of carbon emission is very important in today’s generation as we are in a situation where global warming and environmental consciousness have reached their heights. So the carbon emission of a vehicle can be tokenized into an NFT certificate and stored in a blockchain ledger to minimize that vehicle’s fraud and pollution check. Once it is in the permitted amount or less, the rewards can be credited to car wallets which can be utilized in other aspects like E-vehicle charging, vehicle servicing, and many more such utilizations.
The engine sound of different auto companies has different sound properties that can be customized and have different notes. Those notes can be applied to the blockchain-based NFT token so that the end user can install the notes on the vehicle and plug them in as desired.
When it comes to a vehicle’s resale, the buyer can never be certain that the records of their desired car haven’t been falsified. However, this issue can be easily resolved by storing the complete history of a vehicle on a blockchain. This allows for sharing relevant information about a vehicle with third parties, for example, insurance companies. This gives the user a reliable way to verify a particular vehicle’s history.
We can help you do that.
The VIN (Vehicle Identification Number) of a car can be maintained in the blockchain, which means that if a recall is made, owners of the specific vehicles with a defect can be notified, substantially decreasing expenses for manufacturers and inconveniencing drivers. In the connected car space, telematics includes software-based navigation, vehicle-to-vehicle (V2V) communications, and various other services that can affect vehicle safety and passenger security. We can use blockchain to keep safe the data sent and received by telematics systems. The heightened level of encryption prevents hackers from viewing or using this data.
The convergence of rapidly maturing technologies creates a new economy of movement in smart cities characterized by tokenization and ubiquitous pay-per-use mobility. IoT turns products into services. AI makes the services compelling. Tokenization monetizes the services. And vehicle wallets are the key enabling apps tying it all together.
A tokenized mobility economy – where asset owners charge a marginal cost for vehicle usage, congestion, carbon footprint, road wear, and pollution – will solve many urban problems by linking the economic value of mobility assets to their use and payment. Connected vehicles and digital ledgers will unleash the massive locked capital invested in infrastructure. Transportation assets will become more productive and efficient.
A blockchain-powered solution helps regulate the vehicle insurance sector’s functioning claims management, payment regulation, and claim approvals. To provide bespoke insurance offers & premiums and streamline claims processing (documentation, submission, review resources, verification) and subsequent pay-outs and service contracts associated with financing and executing repairs.
Along with smart contracts for issuing insurance cover, blockchain in insurance can also automate the process of submitting an insurance claim and store real-time mileage information, driver behavior data (where permitted), and other key facts. Vehicle mileages can be fully verified and secured using the blockchain, allowing drivers who don’t use their car often to receive discounted premiums.
The applications of blockchain technology certainly have strong cases for changing many aspects of the automotive industry. The clearest manifestation of the blockchain revolution gaining momentum within the automotive sector was the MOBI (Mobility Open Blockchain Initiative) launch in May 2018, which brings together major automakers (BMW, General Motors, Ford, and Renault) and leading blockchain and technology startups.
One can find various blockchain initiatives already in place from the leading manufacturers. Some notable mentions are:
Ford has launched a blockchain pilot on the IBM platform to ensure the ethical sourcing of cobalt. By tracking the supply chain of cobalt on the blockchain, Ford hopes to confirm that companies aren’t using child-mined cobalt in lithium-ion batteries.
Volkswagen is building a blockchain-based tracking system to avoid widespread odometer fraud within the automotive industry. Ensuring dishonest car sellers can’t manipulate odometers to produce deceptive mileage values will help the buyers save money.
Hyundai has announced a brand new partnership with IBM to advance the application of blockchain technology and cloud-based AI. IBM will specialize in creating a new supply chain financing ecosystem using open-source Hyperledger Fabric. The project aims to automate manual processes, reduce cost and lead time, and improve customer experience.
You are just one step away!
4. Innogy SE
Innogy SE has recently announced launching blockchain-powered charging stations for electric cars across the state through its startup venture Share & Charge. This initiative would help owners of electric cars to get their vehicles charged at charging stations set up by Innogy Innovation Hub’s startup venture Share & Charge. This app would be the world’s first e-mobility community platform supported by blockchain technology.
A blockchain prototype is being tested throughout Mercedes-Benz manufacturing plants. In the future, Mercedes hopes to expand the use of the blockchain beyond its manufacturing plants into all of its other services, showing extreme interest in the nascent technology.
Emerging technologies that had an enormous impact on other industries may have passed the automotive industry. Still, when it involves blockchain, a few companies already invest in this technology. According to a study by IBM published at the end of 2018, 62% of automotive executives are convinced that blockchain will be a disruptive force in the auto industry by 2021. The same study also found that 54% of so-called Auto Pioneers plan to implement their first commercial blockchain network at scale within the next three years.
The automotive industry has always been at the forefront of technical innovation, with automakers constantly looking for new ways to utilize cutting-edge technologies. Having examined several potential use cases for the technology, it is clear that blockchain in the automotive industry can bring significant benefits to the industry and support other innovative technologies and trends. It aims to improve the supply chain processes, introduce tamper-proof record-keeping, and streamline production,
Yet, its biggest contribution to the industry might come from its ability to inspire new types of services and business models. It’s a characteristic shared by all transformative technologies. However, innovators are just beginning to scratch the surface of blockchain applications in the automotive sector. The future automotive market will be starkly different from today. It will need to be more integrated and offer on-demand and personalized services, including autonomous, shared, and connected cars.
Reach out to us today, to discuss your project