Since blockchain’s inception, several years have passed. Despite widespread skepticism regarding the technology’s practicality, numerous businesses have already embraced it. Automotive is not an exception; among the first to introduce their blockchain projects were major automakers like BMW, Volvo, Renault, Toyota, Mercedes-Benz, and others. Those are primarily intended to increase profitability through automated procedures and reduce costs related to the production, delivery, and maintenance of vehicles.
Blockchain, as opposed to the majority of the conventional SAP systems used throughout the automotive industry, helps address certain long-standing problems in the creation of machines, including the traceability of authentic cars and vehicle components and the transparency of supply chain activities.
Let’s now explore in greater detail the benefits blockchain can provide the automotive industry.
Unlocking The Potential Of Blockchain In Automotive Industry
The search, delivery, and distribution of auto parts are typical components of the supply chain for the manufacture of vehicles. Due to scattered inventory software, human error, or other factors, they may occasionally be lost during delivery, damaged, or even stolen.
Each new activity is continuously recorded by blockchain, adding it as a block to the data chain, making it impossible to erase or modify the data without system and user verification. This means that the supply chain for auto parts may be tracked in the end.
The most crucial elements in the production of cars are undoubtedly the bills of lading and inspection records. Significant financial losses may occur if any of these are not provided. With blockchain, all vehicle assemblies may be seen by those who need to know about them on a single platform without having to worry about data loss.
Smart, self-driving cars are a target for hackers more and more as they gain popularity. A blockchain is created in a way that makes it impossible for someone not authorized to break into the system.
Particularly, continuous data recording and cryptographic encryption prevent interruptions in the continuous data flow, making it impossible to “reverse-engineer” the recorded data. Therefore, a blockchain development company is the ideal platform for storing private and crucial corporate data.
The lack of security in communication tools also puts connectivity and network operation at risk from hackers. Using an authorized-only access permission scheme, blockchain may once more narrow this gap. Only certified actors would be able to add new data, and every activity would be visible to the system.
Car Sharing, Renting, And Selling
For owner history records and proof-of-insurance instances, an automaker or a rental car firm might construct automobile profiles in a blockchain application. Every driver’s action, every rental session, their driving patterns, their stops, and other data would be transmitted to and kept on an immutable ledger.
In the event of an accident, the owner of the vehicle would receive the necessary information instantly, without any chance of the driver altering the information. The corporation may do this to avoid having to collect several documents and instead use the data that had already been captured for insurance-related issues.
Car buyers would be able to research a vehicle’s history all the way back to its manufacturing by receiving information from a seller regarding the condition, past owners, and maintenance of the vehicle.
The consistency of the blockchain makes sure that all the data stored in the application is correct and reliable. Due to hesitation and a lack of unbiased information about a particular car or car service experience, today’s car buyers rely more on crowd opinion and reviews than this quick validation journey. As a result, a buyer would receive a specific car with proven specifications in the shortest amount of time.
A payment mechanism supported by a blockchain consulting firm could be used to perform car sales transactions. In this scenario, payments are conducted using blockchain’s smart contracts, which are impermeable to outside interference and cannot be altered without the prior approval of both the system and the end user.
Furthermore, a direct payment that is enforced by blockchain technology eliminates middlemen. Using such an “all-in-one” platform might ultimately help sellers minimize costs and lower car pricing for consumers, which obviously boosts auto sales and enhances the seller’s reputation. An IoT gadget connected to the blockchain would allow a car seller to remotely disable car control in the event of an unauthorized payment.
Car manufacturers might use specific markers to identify authentic auto parts, which could then be tracked using a blockchain-based programme. When original car accessories and modifications are readily available, car maintenance or part substitution becomes apparent and takes significantly less time.
Simply said, a single operator would handle a maintenance claim, gathering all the necessary data at once and sending it to parts allowance. Until recently, handling a claim required coordination between various departments from the automobile manufacturer and may take several days for authenticity verification and part availability.
Also Read Here: How To Incorporate Blockchain Technology Into Your Business
Uses Of Blockchain In The Automotive Industry
In an effort to combat mileage fraud, BMW unveiled its blockchain-powered auto mileage app in 2019. Due to “winded-back” miles, the company calculated that a con artist typically makes more than $3,000 from the sale of a car. It was calculated that the annual harm may reach $6.78 billion. Both a car seller and a buyer can acquire reliable information about the conditions of a vehicle with BMW’s VerifyCar app.
Launching a cooperative blockchain project with Renault, GM, Honda, and Ford will result in a standard for car identification. Each business currently employs its own software with a unique UI. The new standard enables them to utilize a single car identity format, which has the potential to drastically alter the efficacy of the whole automotive business, simplifying car rentals and enhancing service delivery.
Finally, Volvo uses the security advantages of blockchain to track the validity and delivery of its automotive parts. The company sees a lot of potential in blockchain’s ability to help systemize thousands of auto components supplied worldwide, given that it can make 190,000 trucks a year.
Blockchain might offer an additional approach to exploit the advantages of these technologies as the automobile industry shifts toward self-driving, connected, and electrified cars (EV). Supply chain, financial services, and the safe, secure sharing of driver or passenger data seem to be the most suitable use cases.
Due to its youth, there are still issues to be resolved, but given the volume of sectoral investment, blockchain has the potential to create a significant amount of disruption. We’ll be following the adoption of the technology with interest to see who goes all in because to succeed, you have to be in it, just like early Bitcoin investors.