Taras Havrylyukh
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5 Ways to Leverage the Blockchain in the Automotive Industry

Find out how automotive industry disruptors are using blockchain technology to improve autonomous and connected driving

March 01, 2019

7 mins read

Think that blockchain is only about cryptocurrency? This technology goes beyond the hyped crypto field, having the potential to transform industries from finance to healthcare and even politics. Automotive giants, always in the first line of innovators, haven’t missed out on the possibility to explore distributed ledgers. Let’s see how things stand for blockchain in the automotive industry today.

In this article, you’ll read about:

  • The potential of distributed ledgers
  • Five automotive industry trends where the blockchain can make a difference
  • Use cases of distributed ledger technology in the automotive industry
  • Intellias’ experience

The hidden potential of distributed ledgers: can blockchains improve autonomous and connected driving?

Key features of blockchains

5 Ways to Leverage the Blockchain in the Automotive Industry

As you may know, a blockchain is a decentralized distributed ledger that allows network participants to record, share, and maintain information. Gartner estimates that the blockchain’s business value will reach $176 billion by 2025.

Naturally, the automotive industry is exploring ways to leverage distributed ledgers. In May 2018, BMW, General Motors, Ford, and Renault launched MOBI, the Mobility Open Blockchain Initiative. MOBI aims to investigate use cases of blockchain technology in the automotive and mobility fields. To date, more than thirty companies have joined, and the group’s research has already shown results. This cooperation proves that the blockchain can change the future of self-driving and connected cars.

Executives in the consumer products and manufacturing industries (which encompass automotive) expressed the most bullish blockchain outlook, with forty-two percent of them planning investment of at least $5 million in the coming year.

Deloitte Report
Read more: Find out what tech trends will disrupt the automotive industry in 2019

So what makes automotive disruptors spare no expense to experiment with blockchains?

The technology at the heart of self-driving cars relies on big data. This data has to be collected, analyzed, and acted on, instantly and precisely. A blockchain can store and, what’s more important, verify the accuracy of received data. Connected cars form a complex distributed system, and a blockchain can increase trust between autonomous vehicles by continuously verifying events that are exchanged within the network. Also, a blockchain offers better protection from hackers. True, it’s not impossible to hack a blockchain, but it’s much harder than hacking a traditional database.

Another problem blockchains address is network connectivity. Centralized systems may suffer network breakdowns that can lead to accidents (as in the case of Uber’s self-driving car), while the decentralized nature of a blockchain ensures that no connectivity downtime can occur.

The blockchain is making self-driving cars safer, and this reason alone is enough to make OEMs invest in it. Still, there are other implementations of blockchain technology that can reshape transportation, manufacturing, and the user experience within the automotive industry.

Read more: Learn about the advanced safety features that will make you trust your self-driving car

Five automotive industry trends where the blockchain can make a difference

5 Ways to Leverage the Blockchain in the Automotive Industry

Smart automotive manufacturing

The automotive supply chain is a complex mechanism involving numerous parties. Delays or issues at any level mean financial losses. A distributed ledger makes it possible to share a common database between OEMs, equipment distributors, software and hardware providers, regulatory agencies, and others. Blockchain-based systems can ensure transparency, information accuracy, quick detection of problems, instant money transfers, and compliance with regulations.

The blockchain also adds to the security of autonomous and connected cars, since it can connect manufacturers within a common driving and testing database that stores information on simulations, experiments, and failures. This technology can accelerate the development of autonomous driving while making it safer and less expensive.

Seamless car sharing experiences

Owning a car is expensive, but in a couple of years, blockchain self-driving cars could make car ownership in cities a thing of the past. Currently, there are some car sharing and car-hailing services and apps on the market: ReachNow from BMW, Silvercar from Audi, and others like Uber and Lyft. But they’re far from perfect. Some people have reported cars not recognizing the smartphone key and failing to unlock, for instance. Others claim that a car has locked the driver inside when they failed to leave on time.

Blockchain-based identification is safer and faster than smartphone identification. Also, it’s perfect for managing numerous customers and transactions: a blockchain system can autonomously manage all payments based on rental agreements.

Read more: Find out why machine learning is an integral part of connected and autonomous cars

Talking about car sharing, your self-driving car can drive others when you’re not using it. Imagine that it drops you off at work and joins Uber or any other fleet to bring you money at the end of the day. Blockchain technology is a magic wand for driverless cars in car sharing services.

he time has come for the blockchain to reshape the automotive industry. Using blockchain for automotive services permits true peer-to-peer interactions between owners with minimal infrastructure requirements. Data can be stored permanently and managed securely while automated permission and transaction processing will be made much easier.

Paul Brody, Ernst & Young Global Innovation Leader, Blockchain

Payments and taxes

Taxes are a necessary evil, and the road tax situation is hell on so many levels. Why not make payments less stressful? Registration fees, fuel-based payments, road tolls – all of it creates room for speculation and fraud, not to mention headaches and confusion.

With the help of the blockchain, we can adopt an efficient and transparent pay-per-mile system. Smart contracts will aid in specifying additional conditions like vehicle type (diesel, petrol/gas, or electric), capacity (small passenger car or loaded truck), environmental impact, the type of road surface, and more. This way, taxes and payments for a family mini-van going on vacation will differ from those of a Freightliner traveling across America with a load of automotive parts. Paying fees will be frictionless and transparent: once you pass a certain point, the transaction will be processed automatically.

Authentication

Why should losing or forgetting your driver’s license cause problems in the modern connected world? A blockchain can prove your ownership or rental rights instantly. Changes in rights would also be fixed in the distributed ledger. No additional papers needed and no fraud or speculation possible.

5 Ways to Leverage the Blockchain in the Automotive Industry

More than that, every car part can carry a VIN that will be recorded in the blockchain database. This could make car theft plummet. We’ll be able to track stolen parts easily, saving billions for the automotive and insurance industries.

Proving a car’s history

5 Ways to Leverage the Blockchain in the Automotive Industry

When you buy a used car, you should ask a mechanic to inspect it. It would also be great to have a specialist check the vehicle in the police, customs, and other government databases. But even after all these checks, you still can’t be sure that your newly bought car won’t break down at the next turn.

A blockchain can record all major repairs, checks, accident damages, mileage, number of car owners – a car’s entire history from the dealership to the present moment. A clean car will have a detailed record, and any problems, discrepancies, and legal peculiarities will be easily trackable. People are already attempting to develop a blockchain-based platform that will collect data from various registers and sources into a single database.

Use cases of distributed ledger technology in the automotive industry

Right now, the blockchain and the automotive industry are testing their points of contact in different areas. Here are some real-life cases of automotive leaders using or testing distributed ledgers:

  • In June 2018, Volkswagen partnered with IOTA to distribute data securely and wirelessly within the connected car system. IOTA’s system for autonomous cars is a distributed ledger, but it’s not a blockchain. Instead of blocks, it’s built on a DAG (directed acyclic graph). The partners also plan to use IOTA’s ledger for trip planning, booking, and payments within the autonomous vehicle system. By the way, IOTA is a MOBI member.
  • In cooperation with XAIN, Porsche is using blockchain technology to build an app for locking/unlocking cars, granting temporary access, recording traffic data, and receiving real-time notifications about someone opening the car. Increased security and customer trust are included.
  • Ford received a patent under the name “Vehicle-to-vehicle cooperation to marshal traffic.” CMMP tokens will be used to facilitate messaging between cars. The patent document states that the invention can prevent traffic jams and coordinate vehicle speeds through transaction-based communication.

Intellias’ contribution

5 Ways to Leverage the Blockchain in the Automotive Industry

Intellias can boast of creating blockchain-based solutions for the automotive industry. Together with an innovative blockchain startup, we developed a smart contract solution for vehicle insurance. Our end client, a Blockchain Insurance Industry Initiative member, needed a prototype of a web app for selling vehicle insurance policies online. The entire process, from selecting a plan to the final payment, had to be carried out using a blockchain. Intellias has already presented a fully functional prototype of the web app front end, and the cooperation is ongoing.

Conclusion

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.

Tim Bos, CEO of ShareRing and Keaz

The blockchain is a natural development vector for connected and autonomous driving since it resolves the issues of security and trust. It will enhance manufacturing, optimize the supply chain, improve customer satisfaction, and introduce new, advanced services to the automotive industry. Not only OEMs and drivers can benefit from the technology; blockchains will also help solve global issues like traffic management, air pollution control, and car theft. In other words, the blockchain is an indispensable partner of the automotive industry in its race toward an autonomous and connected future.


If you’re considering a blockchain for your next automotive solution, contact Intellias experts and we’ll discuss your idea with you.

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