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Blockchain technology, which has already disrupted the financial services and supply chain industries, has at last arrived in the auto industry.
Over the past year or so, stakeholders in the auto industry have been looking into how blockchain technologies can be applied and many businesses are looking to launch major initiatives this year. Below are just a few of the ways that blockchain is impacting the auto industry around the world.
Parts authentication
Phony auto parts that are genuine in appearance frequently get into the supply chain and land in dealer service centers. These inferior parts often fail soon after being installed, causing damage to the automaker and part supplier brands. To combat this fraud, automakers have used 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 forward-thinking German utility, innogy SE, has launched a platform to realize this usage of blockchain. The Digital Twin platform is designed to give every product its own a "digital twin" for authentication purposes.
Vehicle tracking
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.
Electric car infrastructure
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.
The Blockchain Mobility Platform, also produced innogy, is designed for this M2M economy. It makes it possible for stakeholders to opt-in while augmenting the adoption of electric vehicles. For each stakeholder, there’s an incentive to joining the platform: new products and services that can be offered on top of the M2M services.
A Blockchain Mobility Platform helps to create an habitat of new electric car products and services, transitioning society away from gas-burning vehicles.
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