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Blockchain Technologies in the Automotive Industry

Today’s vehicles are evolving in the direction of becoming much 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 and better access to and transparency of information, blockchain has the potential to strengthen trust and collaboration among businesses, consumers and even vehicles. Various emerging technologies that had a huge impact on other industries might have passed the automotive industry, but when it comes to blockchain there is already a handful of companies investing 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 clearest manifestation of blockchain revolution gaining momentum in the automotive sector is perhaps the launch of MOBI (Mobility Open Blockchain Initiative) in May 2018 that brings together major automakers (BMW, General Motors, Ford and Renault) and leading blockchain and technology startups and premier organizations such as IBM, Accenture, and ConsenSys. NGOs and academic institutions such as the World Economic Forum and Blockchain at Berkeley are also involved. In February 2019, a two-day colloquium that brought together all members of MOBI took place at the BMW Group IT Centre in Munich. The event was primarily intended to promote and develop common standards for applying blockchain and distributed ledger technologies (DLT) in the mobility industry. The founders of MOBI hope that they can use blockchain technology to shape a future of mobility that is greener, safer, and improves the quality of life in the cities. For achieving this, standardization efforts have to be made. Only with a set of clearly defined universal standards can the stakeholders develop an open, independent platform that would enable the industry-wide application of blockchain technologies.The automotive sector has always kept a keen eye on new technologies in the hope of streamlining operations, introducing new end-user functionalities, drive revenue growth, etc. Same applies to blockchain, in what follows we are going to list some of the benefits this cutting-edge technology brings to the car manufacturers and users: Supply chain management. Car parts could be lost in delivery, stolen, replaced, damaged, etc. Blockchain would allow the manufacturer to have a complete follow-up of these pieces. In the case of a recall, blockchain would also facilitate the procedures: since it carries the information on the origin of the piece, we could control if any modifications have been made to it or if a manufacturing defect occurred. Manufacturing processes. There are numerous opportunities to take advantage of blockchain technology throughout the automotive manufacturing process. We can use blockchain to store data from bills of lading for vehicle components and quality-inspection records created during the manufacturing process to WIP information for each vehicle assembly from start to finish.Finances. All processes that require manual data insertion, include transactions or transaction costs, as well as revisions, among other things, could be streamlined. The Blockchain would accelerate these processes and keep them updated throughout the lifecycle of a car. Vehicle safety and data security. The more connected a vehicle is, the more susceptible it becomes to potentially deadly cyber attacks. Thanks to blockchain’s strong cryptographic roots that cannot be reverse-engineered, it is the perfect place to store data since it cannot be changed. Telematics. In the connected car space, telematics includes software-based navigation, vehicle-to-vehicle (V2V) communications, and a host of 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.Smart insurance. Blockchain technology enables the unmanipulable and transparent logging of the vehicles’ sensor data in a decentralized network. This unimpeachable documentation of a blockchain “black box” could help to resolve the circumstances of an accident, especially when it comes to autonomous vehicles. Blockchain could also enable insurances to be taken into other vehicles like a user profile, for example in carsharing. Buying or selling a car. For car owners, blockchain-based registries would mean easier verification of the vehicle’s history (e.g. whether it has been in an accident) allowing, therefore, major transparency when purchasing a car. Another pro would be having an overview of the parts of the vehicle: the users could look up the origin of the carpets and solve repair-related problems. Not to mention, that thanks to a smart contract, the seller and buyer could enforce the transaction of goods without the need for a middleman.Leasing and vehicle financing. Thanks to blockchain-based smart contracts we could optimize and automate various processes in the vehicle leasing and financing section. For example, if a car’s leasing rate hasn’t been paid yet, it is possible to prevent it from being used by deactivating the unlocking system. Carsharing. Blockchain technology could enable a secure digital identity at carsharing. With blockchain, personal settings and preferences could be saved in the car safely avoiding exposure to unnecessary parties. This could also enable P2P carsharing. Meanwhile, blockchain could facilitate the carsharing procedure for users as a single registration in the blockchain ecosystem is good to be used for all carsharing offers from different service providers in the ecosystem. Car rental company. Blockchain would allow the rental company to monitor if the cars are in cleaning, maintenance, etc. It would be easier to know what is happening, have a follow-up and decide whether to count with that particular car or not. We can already find a variety of different blockchain initiatives from the leading manufacturers. For example, Ford has launched a blockchain pilot on IBM platform to ensure ethical sourcing of cobalt. By tracking the supply chain of cobalt on the blockchain, Ford hopes to ensure that companies are not using child-mined cobalt in lithium-ion batteries. Volkswagen is building a blockchain-based tracking system to prevent odometer fraud that is widespread in the automotive industry. Making sure that dishonest car sellers can’t manipulate odometers to produce deceptive mileage values, will help the buyers to save money. Hyundai has announced a new partnership with IBM to advance the use of blockchain technology and cloud-based AI. IBM will focus on creating a new supply chain financing ecosystem using open source Hyperledger Fabric. The project aims to automate manual processes, reducing cost and lead time, and, through that, improving customer experience. Through the MOBI initiative, General Motors and BMW are backing blockchain tech to share self-driving car data among themselves and other automakers. The blockchain standardization efforts made by MOBI also take us a step further a wider blockchain adoption in the industry.We have been through some pretty remarkable applications of blockchain technology and can say with certainty that many aspects of the automotive industry are about to change. However, innovators are really only just beginning to scratch the surface of blockchain application in the automotive sector, so we’re still at the beginning of a long road of disruptions

It is the moment to start studying and get on board with the Blockchain Revolution!


Zigurat Global Institute of Technology