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How is Blockchain Accelerating the Automotive Industry?

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How is Blockchain Accelerating the Automotive Industry?

Big revolutions in the automotive industry are nothing new; they have happened from time to time and have changed the entire working of the industry. In fact, it is most probable that the next revolution in the automotive industry is just around the corner, and from the looks of it, it is going to be blockchain.

‘Blockchain Brings in Trust’

According to a report by IBM, new research shows that 62 percent of automotive executives believe that blockchain would be a major disruptive force in the automotive industry by 2021. The report also finds that 54 percent of executives expect new business models to invest in blockchain, whereas, around 50 percent of OEM executives around the globe believe that blockchain solutions would create a huge impact on fleet management services. And the belief that blockchain will improve imperfect information in business networks is shared by 55 percent of OEMs and 47% of suppliers.

Areas of the Automotive Industry the Blockchain Movement Would Most Disrupt

Commerce: It is known to everyone that data integrity plays a major role in modern financial systems. As a result, the problems faced regarding errors due to manual handling of data are many. A distributed ledger technology streamlines these processes, eliminating the risk of manual errors. Furthermore, each party gets a record of data and this increases transparency and credibility of an enterprise.

Supply Chain Management: Any automobile is a whole made up of its parts. Thus, many different parts are required to manufacture a single car or a truck. This involves an extensive network of different parties, individuals, organizations, and their activities. Due to the complexity of the supply chain, the parts are in constant risk of getting damaged, counterfeited and stolen.

A distributed ledger would help in the efficient management of the supply chain and would enable different parties to track all the components at all stages of production. Furthermore, as the report by IBM also highlights, aftersales, which is the secondary market of the auto industry, can also hugely benefit from blockchain. Implementing a blockchain-based solution in the automotive supply chain would eliminate problems with recalls, counterfeit products, and consumer safety.

Third Parties: The auto industry also involves a host of third parties like maintenance insurance and other financial services. Blockchain would allow organizations in their handling of personal data and levels of sharing it with third parties. A great example is that of on-demand mobility services (MaaS), which, through blockchain, allow the merging of various forms of transport services into a single mobility service that could be made accessible on demand. Ridesharing is one such application of a robust mobility solution.

Connected Cars Technology: This is the application of blockchain in the auto industry which is most near the hand. A lot of new trends are emerging to increase vehicle connectivity, and blockchain, with its power to connect with transparency, can bring about a major positive change in the way this connection works.

Industry Giants Adopting Blockchain

Several industry giants from BMW to Porsche are adopting and experimenting with blockchain technology. BMW has not only shown much positive interest in the technology but has also in the past, collaborated with startups such as Vechain for working on the company’s VerifyCar app which was designed to entitle each owner a digital passport of their vehicle.

Hyundai too has partnered with a startup called Blocko for the development of an in-house platform to track used cars. Another major firm that can be cited is Porsche, which has teamed up with a blockchain startup XAIN for building blockchain-based applications for its vehicles.

Other than these, many other players in the industry are looking up at blockchain as a major game-changer in the future of the auto industry.

Expanse: Accelerating Faster

Although the use of blockchain in the auto industry is accelerating pretty fast, much needs to be done yet. IBM has also included in its study the fact that presently only a small number of OEMs and suppliers are ready for blockchain. This, rather than working as a setback, is an encouraging reminder that there is still a lot of things to be done to contribute to the integration of blockchain in the automotive industry.

Expanse, a platform built on Ethereum, gives you high security and scalability and allows you to build blockchain solutions for practical problems. It is just the perfect place to start with your ideas and become a part of the incoming blockchain revolution in the automotive industry.

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I am a content writer with interests in life sciences and blockchain. I believe that blockchain has the potential to transform every aspect of human endeavor. I love surfing the internet, reading, learning new things, and trying new cuisines.

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