The simplest way to define blockchain is to call it a digital ledger that is decentralized and can be used to record, share, and maintain information by a community. There is a fair chance that you already know it because blockchain is what everyone’s been talking about.

What most people don’t know, however, is the scope of the blockchain. Now, it isn’t limited to the financial industry. It is, in fact, one of the most brilliant pieces of technology of this century. It has the potential of transforming every industry including the automotive industry.

For anyone who has an interest in the automotive industry, it is a known fact that this industry is one of the firsts to embrace any new technology. According to IBM’s report, a significant 95 per cent of auto manufacturers are interested in investing in this technology in the next few years. Seems like the industry is already betting on blockchain; we guess no one would be surprised to know that the industry has already begun utilizing it.

Today, we will take a look at what the automotive industry is currently doing with the blockchain technology. We will also see how it will further explore and adopt it in the future.

Smarter Car Buying and Selling

If someone says we buy cars or sells cars, what are the factors you look for to determine their credibility? Technology is definitely changing the automobile marketplace. With blockchain powered applications and platforms, fraud-proof transactions are now absolutely possible.

Both the parties involved can now sign smart contracts, and the whole financing process can be simplified.  Moreover, blockchain facilitates anonymity to preserve the privacy of the parties involved. In a similar manner, car manufacturers can also expedite the transaction with their importers or dealers.

A fine example is DocuSign by Visa with a goal to allow buyers to just walk in and leave with a car within a matter of minutes.

So, blockchain is basically eliminating heavy paperwork, excessive waiting, and the risk of fraud by making the process simple and transparent.

Effective Communication and Interaction

Communication has become a crucial aspect of the automobile industry, due to the emergence of autonomous cars. By utilizing IoT and AI technologies, there are just too many devices communicating with each other at any given time. Blockchain technology is playing a vital role in making this communication seamless and secure.

The interaction between these devices is now recorded, shared, and secured on an immutable database. The ledger is shared between OEMs, distributors, service centres, insurance providers, and many other entities. They can all work together to improve the interaction between different parts. This is done in a way that allows them to sense their own needs and notify accordingly. This way, the car is autonomous enough to tell the driver that it needs certain repairs or replacement. In the future, this interaction can be improved to a point where the car will be able to book an appointment. It would even negotiate prices for those services before it can make a payment.

A fine example here is Renault’s digitized car maintenance program that makes use of the blockchain technology. The entire car repair and maintenance history are logged in a shared blockchain ledger. They are further working on a vehicle-based micro-transaction system.

Another noteworthy development is Oaken’ssmart tollbooth. Enabled by the blockchain technology, these toll booths will allow cars to pay automatically as they pass.

Foolproof Vehicle Tracking

Blockchain technology can also play a strong role in the prevention of fraud and unethical practices in the industry. Sometimes dealers keep a transaction hidden from the bank. This leads to many potential issues,andit is considered a fraud. Blockchain technology provides a more transparent view of the transactional history and allows for tracking of a car’s life event.

One of the most significant developments in this area is The CarPass Project. It utilizes the telematics data to track and monitor car’s movement. It is not just where the car was driven, but also how it was driven. All of this data can be used to predict the resale value of the vehicle at any given time. It is predicted that this data will also be utilized for other purposes. For instance, assessing manufacturing quality as well as the environmental impact of the vehicle.

CarVertical is yet another vehicle history tracking solution that utilizes the blockchain technology. The platform is created to provide potential buyers with complete and accurate information about the car they are about to buy.

Auto Part Authentication

Low-quality fake auto parts woes in the automotive industry. Many buyers don’t even realize they are buying a phoney part because there is no proper way to authenticate. Once a phoney part enters the supply chain, it is hard to identify and track. Car owners know how risky this is. Many fraud prevention techniques were employed in the past, but none of them has worked efficiently.

Now, blockchain technology is making it possible to authenticate every part without fail. Soon, each genuine part will have its own tag with a unique ID and immutable timestamp bearing incorruptible information. While this will help car buyers and owners check for car part authenticity, it will also help manufacturers be more proactive with necessary recalls.

A German utility, Innogy SE, has launched ‘The Digital Twin’ platform to nurture this usage of the blockchain. This platform is designed to give every product its own “digital twin” i.e. an immutable ID for authentication purposes.

Conclusion

In conclusion, we can only say that there is no doubt about the fact that the blockchain technology is the future of the automotive industry. It has the potential to resolve numerous problems that have been plaguing the industry for years. The best part is that the technology is proving its worth not just for manufacturers, but also for dealers, consumers, distributors, financiers, and other parties.

Not to mention, the technology can support the initiative for more autonomous and eco-friendly vehicles in the future. Leading manufacturers and corporate giants in the industry have already made their move,and it seems like the industry is all set for the next round of revolution – thanks to the blockchain technology.