The blockchain revolution is taking over the automotive industry. Here, we break down three ways the automotive industry is gearing up with blockchain technology.
Tracking the supply chain
Blockchain is an ideal tool for maintaining data, and one use case for the technology is improving supply chain traceability throughout the automative industry.
Recently, Ford Motor Company began test implementations using blockchain technology to trace the entirety of its product supply chain.
The supply chain can be a lengthy process that involves acquiring resources from across the globe and transporting them to factories. Since there are a lot of steps involved, it can be hard to manually track a supply chain.
However, with blockchain, information related to the supply chain can be updated at each juncture.
This helps automotive companies ensure that their supply chain process is compliant with the relevant laws and regulations, and they can ensure that the products they purchase are sourced ethically.
For instance, miners, smelters, and consumer brands rely on third-party audits to meet regulatory and compliance guidelines. However, since blockchain technology can provide immutable information, this reliance can be alleviated.
Building a reliable trust protocol
Another interesting application of blockchain in the automotive industry is building a reliable trust protocol. This isn’t a new concept either.
Back in 2017, Groupe Renault announced its plans to create a digital car maintenance book by leveraging blockchain technology.
Groupe Renault teamed with Microsoft and VISEO to create the product.
The digital car maintenance book has open architecture and gathers important information in one place that is fully accessible to the customer.
The project stemmed from the fact that information related to a vehicle is split across multiple information systems maintained by multiple parties such as manufacturers, insurers, repair shops, and so on.
By collating this information in one location, it helps create a reliable trust protocol where the owner can have full access to their vehicle’s information.
This is also useful when you are either purchasing or selling a vehicle, since a lot of certificates, the log book, and other important documentation is often paper-based.
However, if this information was moved to a blockchain, not only would paper wastage be reduced, but the transference of documentation would become significantly easier.
With the correct encryption, the data can be secured so that no identifying information is used and only you can see it.
Since blockchain relies on a P2P system, you can also facilitate trades directly with the buyer/seller and remove the middleman. This serves to help you cut costs, since the fees for the middleman will also be eliminated.
Information becomes harder to falsify
One issue with buying and selling vehicles is that people like to falsify information that would otherwise affect the value of the vehicle.
An example of this is odometer fraud. The National Highway Traffic Safety Administration (NHTSA) has previously noted how more than 450,000 vehicles are sold each year with false odometer readings. The odometer displays how much mileage the vehicle has done.
Information and data is difficult to tamper with on a blockchain, and if the automotive industry fully adopts blockchain technology, odometer fraud can be reduced.
This is because the mileage can be recorded on the blockchain as well as the odometer. Consequently, if the two values do not match up, then the buyer will know the seller is lying.
Hopefully this introduction to the role of blockchain in the automotive has helped you understand how the technology could impact the industry for the better.
Discover which organisations could benefit from having greater knowledge about blockchain here on Coin Rivet.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.