According to a report by IBM institute for business value, it’s estimated that 62% of the automotive industry is set to utilize blockchain technology for various use-cases by 2021. Some of the most renowned and beloved car brands are tapping into DLT, as Blockchain writes a new chapter for the industry with evangelist confident that the Automotive industry will be next in line to be disrupted by this new nascent technology.
Even more so, 95% of Automotive manufacturers are planning on making ‘’moderate to significant” investments in the technology with Enterprise through endowing startups to aid the development of potential blockchain-based solutions.
What’s driving ‘’Connected car’’ services will be the marriage of Automotive technologies & Blockchain. The technology is set to provide a ‘’much-needed’’ change that’s capable of addressing key issues faced by the struggling automotive industry. At the moment, enterprises are busy testing out blockchain-pilots with the clear intention of driving innovation and solutions across the entire ecosystem, or where it’s most applicable.
To get a better idea of the disruptive impact of DLT, here are several use-cases in which Blockchain will reshape the automobile industry:
Commerce: Since data integrity plays a vital role in modern finance where problems can arise when an error occurs as the result of manual data entry, facilitating trade, and data management. Distributed Ledger technology (DLT) is meant to streamline these processes, allowing independent parties to keep an accurate record of a vehicle’s lifetime.
Supply Chain: Thousands of parts are needed to manufacture a car, a process which involves an extensive network of individuals, organizations, resources & activities. Due to the complexity of managing large supply chains, parts are essentially at risk of being damaged, stolen, and replaced. By Implementing DLT to further manage the supply chain, companies will have an effective & efficient means of tracking all the components from the day it’s produced, to it being shipped as the final product.
Mobility: The involvement of Third-parties such as insurance, maintenance, and even cleaning services requires vehicle owner to disclose confidential information. The use of Blockchain allows customers to manage personal data and share that information with third-party service providers. On-demand mobility services (MaaS) through integration of Blockchain, allows various forms of transport services into a single mobility services that’s made accessible on demand. MaaS is often used to describe a shift away from personally-owned modes of transportation and towards mobility solutions, solutions consumed as a service such as Ride-sharing is a good example.
However, there’s one area in which Blockchain will have the biggest impact and is set to disrupt, which has to do with Connected Car Technologies. The next digital revolution to have a deep impact on the automotive industry will be all about communication and autonomous vehicle. For now, there are several trends that seem to be shaping the future of Connected Cars. The term ‘’connected car’’ is used to describe the digitization of IoT-compatible cars and advances in technology that allow vehicles to communicate & connect with one another over a Network.
It’s true that Connectivity will be one of the main factors driving the connected cars development, and Blockchain is set to play a vital role when it comes to improving the quality and speed of vehicle communications. DLT has the ability to store asset ownership rights, settle transactions as part of a globalized payment system, and allow for greater transparent Supply-chain management
Hyundai Motor Group’s subsidiary, Hyundai AutoEver, has announced a formal partnership with Blocko, a South Korean firm that specializes as a Blockchain-as-a-Service (BaaS) provider. Blocko has signed a MoU with Hyundai Motor Group’s ICT platform, with the intention of teaming up to develop an in-house platform for the Automotive giant. With the help of Blocko, Hyundai is applying Blockchain to safeguarding vehicle’s ownership, allowing the tracking of confidential vehicle information such as mileage, service history and age. The BaaS provider also specializes in open-source solutions, introducing Aergo, Blocko’s latest undertaking that is set to allow Enterprises to make greater use of decentralized technology without having to comprise, by introducing a unique Hybrid Blockchain. Hyundai has announced that its platform will be migrating to Aergo Mainnet, giving us a glimpse of a future where Automotive giants are keen to utilize a more open and public blockchain of choice.
For now, Hyundai intends to use a blockchain-powered platform for vehicle lifecycle management, Mobility-as-a-Service (MaaS) and insurance. The Hyundai affiliate company that manages the IT for all 54 of Hyundai Motors Group’s systems. You can read more about it here.
The german car brand has been supportive of Blockchain back in 2018, publicly announcing that it will use the technology as a way to share self-driving car data among Network participants. In an attempt to utilize valuable data collected by self-driving vehicles, BMW plans to use Blockchain to overcome one of the biggest barriers hindering the mass adoption of autonomous by essentially unlocking data that is being kept in silos.
In the past, BMW has collaborated with Blockchain-based startups such as Vechain to work on the firm’s VerifyCar app which designed to entitle each owner, a digital passport of their vehicle. The firm also plans to use the technology to combat manipulated odometers, which is estimated to cost $6.78 billion annually in Germany alone. BMW has also joined the ‘’Mobility open Blockchain initiative’’, a group that was formed with the goal of implementing blockchain to make mobility safer, greener, cheaper and more accessible. In the coming years, BMW will be one of the pioneers in the automotive industry to implement DLT for a number of concepts ranging from supply-chain management, to interconnected autonomous vehicles.
An automobile manufacturer that specializes in high-performance luxury sports cars has partnered up with the Berlin-based startup, XAIN, to test blockchain applications to be integrated in Porsche vehicles. Porsche is said to be the first car manufacturer to implement and successfully test Blockchain according to statements made by company. Over the years, Porsche is said to be piloting the technology for the application of locking and unlocking a vehicle, with the grand idea of letting car owners temporarily give someone access to their car
In addition to testing, in the past Porsche has finalized a $170 Million loan using Blockchain, by completing a deal with Banco Bilboa Vizcaya Argentaria’s (BBVA), a Spanish bank known for being a Blockchain advocate and issuing out syndicated corporate loans. Porsche has officially become the first non-Spanish company to complete an acquisition term loan that has been entirely arranged through distributed ledger
Industrializing the Blockchain for the Automotive Industry
It’s expected that Automotive Industry will benefit from new technological advancements throughout the years and perhaps even write a new chapter for the sector. With the introduction of electric cars, full autonomy and ride sharing services, there is the possibility of a seismic shift that could lead to a future where Blockchain is the ideal solution for the management of data.
Leave it to automotive companies to refine and redefine existing technologiesby introducing new, exciting concepts like artificial intelligence and connected cars with the end-goal of giving us a driving experience that will be like nothing we’ve ever known before.
A tipping point can be expected within the next five years, as there are several factors such as the impact of changes inautomotive ownerships, the release of sales models and the greater acceptance & adoption of Blockchain. For now, DLT is finding its way to apply concrete applications within the automotive sector offering a wide-range of viable solutions. This is a period of pilots and trials, prior to the wholesale adoption of technology since we’re at an early stage.