Gaurav Yadav


Blockchain Writing a New Chapter for Automotive Industry

Blockchain technology, which has already disrupted the financial services and supply chain industries, has at last arrived in the auto industry.

We will look at some potential applications of blockchain in the automotive industry along with a few real life examples. So, sit tight !

By this time , you must have read hundreds of articles about what is blockchain and what are its advantages. So, lets not waste our time on that again and come to the point directly. Let’s talk about what blockchain can do for the automotive industry. Since the advent of cars, the automotive industry has always embraced technological advances, but the pace of change has accelerated so rapidly that auto original equipment manufacturers (OEMs) worldwide are struggling to keep up. Automotive industry is changing, and blockchain will make a significant impact on that change. Believe me, blockchain will be the next big thing, and it will not skip the automotive industry. Over the past year or so, stakeholders in the auto industry have been looking into how blockchain technologies can be applied in businesses and are looking to launch major initiatives.

The Automotive industry is a complex ecosystem with multiple parties involved in the design, production, distribution, marketing, selling, finance and servicing of vehicles.

Outlined below are some example scenarios:


With the rise of autonomous cars and millions of devices communicating with each other. There is a need that these interactions and transactions exist on a immutable database of shared, secure, and highly permissioned access. A shared ledger between automotive OEMs, parts distributors, dealers, service mechanics, insurance providers, and others could support the ability for parts or equipment within a car to autonomously sense its own needs. For instance, a car could advise the driver about the need for repair, contact remote users for updates or nearby suppliers for replacement parts, negotiate pricing and appointments for service and repairs, authenticate the proper technician, and process the respective payment for services.

The latest example of this blockchain transparency across interactions is launched by Renault. The French automaker is piloting a digitized car maintenance program , which uses blockchain as a shared ledger to log all car repair and maintenance history in one place. The next pilot, it says, will focus on vehicle-based micro-transactions essential to integrating the IoT with the exchange of value.

Oaken Innovation recently demonstrated the idea of a blockchain-enabled tollbooth, in which Tesla cars automatically pay as they pass through toll booths, as both nodes (car and tollbooth) have ethereum nodes, which use smart contracts to trigger a machine-to-machine (M2M) transaction.


Phony auto parts that are genuine in appearance frequently get into the supply chain and land in dealer service centers. These parts often fail very soon after the installment and in turn causing damage to the automaker and part supplier brands. To combat these frauds, automakers have been using a number of layers of anti-fraud technologies and operations, but somehow phony parts were always capable of seeping into the supply chain.

Blockchain can address this problem with the creation of distinctive ID for every part, together with immutable timestamps from when the part is created. These tags connect to the blockchain and can be set into the part to add a level of authenticity protection. Information on authenticity can be made accessed by the person who owns the vehicle to confirm which parts have been changed out, to the manufacturer to more efficiently perform recalls, or to the service center to signal when a part has arrived at its usage limit.

A German utility, innogy SE, has launched ‘The Digital Twin’ platform to nurture this usage of blockchain. The Digital Twin platform is designed to give every product its own a “digital twin” for authentication purposes.


A car manufacturer must wait several weeks or months before it receives payment for a shipment of vehicles from an importer/distributor/dealer. With multiple parties controlling different steps in the chain it is a heavy flow of paperwork. A Blockchain based system would enable greater transparency of accurate information between the different parties, faster processing of export/import and banking documentation and ultimately reduce the settlement period.

An auto finance provider generally has no idea of the real driving behaviour of its car drivers or their vehicle’s service history. A Blockchain based system would enable driving patterns and service events to get sent to a shared ledger that all parties have access to. Transparency of information about a vehicle’s real wear and tear would help the auto finance provider to more accurately gauge residual value of the vehicle. Typical auto financing includes a host of verification steps to which blockchain could be applied for efficiency gains.

Indian automotive OEM Mahindra, created a blockchain incubator focused specifically on the automotive financing use case.


A manufacturing plant must coordinate effectively with multiple tiered suppliers, 3rd party logistics and transportation companies to ensure timely delivery of parts and optimised inventory levels. The automotive supply chain is incredibly complex, consisting of numerous types of parts, hardware, software, and firmware suppliers, distributors, dealers, regulatory agencies, insurance companies, and more. A Blockchain based system would enable greater transparency of accurate information between the different parties; improving just-in-time logistics, reducing erroneous orders and raising inventory turns. Various blockchain technologies could also be applied along multiple phases. Security, identity, and permissioning impact anti-counterfeit measures in the supply chain; smart contracts, oracles, and custom code support security and compliance adherence; payments and contracts transfer to expedite reconciliation of the deal and the transfer of money and assets from one party to another.

The Toyota Research Institute (TRI) announced today that it is exploring blockchain and distributed ledger technology for use in the development of a new mobility ecosystem that could accelerate development of autonomous driving technology. Blockchain technology sends information over a network of independent computers, known as a distributed ledger, intended to ensure that the transaction is secure and ownership rights over the data/property are protected. TRI believes blockchain may create transparency and trust among users, reduce risk of fraud and reduction or elimination of transaction costs, such as fees or surcharges applied by third party institutions


A common, unethical car dealer practice is to sell a showroom vehicle and then not report the sale to the bank, which had provided a loan for the vehicle. This practice allows a dealer to have working capital to bridge payroll and suppliers. If the bank catches on, it will take immediate action against the dealer. However, because the car is sold legally, the bank has no claim on the vehicle. At the same time, the financing to the dealer has been spent and must be written off.With transparent access to data, the asymmetry in information that allows this practice to happen goes away. Blockchain provide instant transparency and gains value as more stakeholders opt-in.

The Carpass project is designed to facilitate vehicle tracking through a “digital wallet” that tracks a vehicle’s “life events.” It incorporates telematics data that monitors where and how a car has been driven, primarily in situations where the engine is worked hard. By using the car history, artificial intelligence algorithms can accurately predict the resale value of the car at any given time. Being capable of tracking a vehicle also means better enforcement of environmental laws and auditing of manufacturers. Vehicle tracking also give manufacturers the chance to sell value-added services to customers.


As electric cars become more prevalent, it will require a new machine-to-machine (M2M) infrastructure that includes energy providers, charging station owners, automakers, parts suppliers and car owners. No one enterprise can manage the intricacy to unite stakeholders, and no single entity should possess the platform, which would create a monopoly.

Innogy SE, a subsidiary of German energy conglomerate RWE, announced that it has launched hundreds of blockchain-powered charging stations for electric cars across Germany through its e-mobility startup venture Share&Charge. The new e-mobility solution allows owners of electric cars to charge their vehicles at any of the new charging stations set up by innogy Innovation Hub’s startup venture Share&Charge, as well as already existing charging points by making digital payments in euros using the Share&Charge app. This app is the world’s first e-mobility community platform that uses blockchain technology.


Ride-hailing services such as Lyft and Uber are already reinventing the way we use our vehicles. With a few swipes on an app, a driver picks you up in their car and takes you to your destination.

Blockchain could help make this vision a reality. In August 2017, consulting firm Ernst & Young (EY) announced the launch of Tesseract. This blockchain-based system facilitates the sharing of not just rides but vehicle ownership. Eventually, it could help owners manage entire fleets of autonomous vehicles. The system would automatically settle payments on whatever basis the owners agree upon.


  • Companies ranging from IBM and Context Labs to Ford and BMW announced their collaboration at this year’s Futures Blockchain Summit in Dubai and have gathered together to form the Mobility Open Blockchain Initiative (MOBI). The association will explore further blockchain use and study how its technology can make the industry of global transportation less expensive, safer and more widely accessible to citizens around the world.
  • Porsche praises themselves as the first company in the industry that tested an implementation of blockchain into their systems. In February they announced, on their official blog, that in collaboration with Berlin-based start-up XAIN they are testing blockchain applications directly in vehicles.
  • In February 2017. Daimler AG, famous by their brand Mercedes-Benz, joined Hyperledger organization as their premium member. Hyperledger is a collaborative cross-industry effort created to advance blockchain technology.
  • CarVertical is working on blockchain-based solution which solves a problem with non existing transparency about car history. If we consider that every car has on average 3 to 5 owners during its lifetime, it’s clear that 80% of car owners don’t know anything about their cars. The startup said they will gather as much information about car history as possible, from different sources, and put it into the blockchain registry. That way if you want to buy a used car you will always be able to check car’s history.
  • IBM and Maersk have recently announced a collaboration to create an industry-wide global trade digitization solution built on Blockchain to transform global, cross-border supply chains.


While these applications of blockchain technology certainly have strong cases for changing many aspects of the automotive industry, innovators are really only just beginning to scratch the surface of blockchain application in the automotive sector.

There are endless possibilities, some of which have already been conceptualized–blockchain incentives for more eco-friendly driving, blockchain-based automotive insurance and financing, blockchain-based automotive titles, blockchain for remotely locking and unlocking vehicles–the list goes on and on. With Blockchain proving to be the future of security, and with cars essentially becoming IoT devices, the fusing of both together seems only natural. It makes perfect sense for leading car manufacturers to be the first in line for this cutting-edge technology and undoubtedly blockchain will play an important role in the future of the automotive industry.

sources: ,

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