Blockchain technology is a catalyst for Industry 4.0 disruption. Companies, regardless of industry, find significant potential in decentralized use cases to improve their operations. Blockchain in automotive industry is the top-ranked industry that uses this technology.

The most complicated sector is the automotive one. This makes it difficult to find innovative ways to improve operations. There are many ways that companies can utilize this technology solution  to meet customer demand and average market trends.

This distributed ledger is capable of handling all aspects, including cost optimization, team onboarding, manufacturing tracking and more. Check out this blog to learn how blockchain technology can be used to benefit the automotive industry.

 

What is Blockchain Technology? 

Blockchain technology is a new technology that transforms the commercial transactions process. It allows transactions to be made using the digital currency Bitcoin. It is correlated with many commercial sectors.

 

 

Its promoting structure, rich functionality, and wide range functions of the shared ledger of Blockchain system systems have the potential to transform the performance of healthcare. Blockchain technology is now being implemented in all Industries, including the Automobile sector.

The Bitcoin technology is used in finance to protect transactions through the peer-to-peer interface. Blockchain in automotive industry has smart features including decentralization, the management of records and the transfer of digital money between parties using fabricated smart contracts. Blockchain technology is helping with logistics operations.

Automation technology improves transparency and allows parties to interact with each other. It removes mediators and third-party authorities. This saves time and money and opens up exciting possibilities for companies to develop future business models.

Examples of Automotive Companies That Use Blockchain Technology

Here are the examples of companies that use blockchain in automotive industry. So let’s have a look.

 

1. BMW

BMW uses blockchain to track its vehicles’ status, so customers can always access accurate information about their cars.

2. Ford

Ford has partnered up with IBM and Sweetbridge in order to launch a blockchain-based platform that will allow for parts procurement and supply chain management.

3. Toyota

Toyota teamed up with the Massachusetts Institute of Technology (MIT) to investigate blockchain-based methods of securely managing vehicle data.

4. Volvo

Volvo uses blockchain technology to ensure the safety and quality of its products across the entire supply chain. This technology reduces recall risk and helps to ensure that components meet strict requirements.

5. Audi

Audi uses blockchain to manage customer data and provide personalized experiences for drivers. If you want to create automotive software for your business, you must take assistance from an experienced automotive software development company.

6. Honda

Honda uses blockchain technology to secure vehicle data and allow for driver performance evaluations to improve road safety.

7. Volkswagen

Volkswagen uses blockchain technology to increase the efficiency of its supply chains. Volkswagen can cut expenses and shorten the time it takes to commercialize new goods thanks to this technology.

8. Tesla

Tesla uses blockchain technology to trace its lithium-ion batteries’ origins to reduce costs and ensure quality control.

9. Mercedes-Benz

Mercedes-Benz uses blockchain to detect fraud and manage identity, protecting its customers against cyberattacks.

10. General Motors

GM uses blockchain technology to secure vehicle data and provide personalized customer experiences.

These examples show that many companies already use blockchain in automotive industry to improve operations and deliver better customer experiences. We can expect more companies joining the trend as technology advances and unlocking even greater potential from blockchain-based technologies.

 

 

Advantages of Blockchain in Automotive Industry

Blockchain technology is a powerful tool in the automotive industry because of its immutable decentralized technology, transparency, and fully developed, efficient functioning system.

Blockchain technology could be the ultimate solution for the automotive industry. It promotes security, efficiency and total autonomy in the business.

These are some of the potential benefits that blockchain in automotive industry could bring:

 

 

1. Transparency and Security

Blockchain technology gives each member of the network access to all financial transactions and contracts. This greatly reduces the risk associated with transactions. Because transactions are stored securely without penetration, companies can choose suppliers and not be vulnerable to fraudulent supplies or counterfeit parts.

Smart contracts that are legally enforceable and permanent may be made utilizing blockchain technology. This is crucial in a sector of the economy that significantly depends on raw resources imported from every corner of the world.

As such, inconsistencies can be difficult to spot. Blockchain technology offers unprecedented transparency and security.

2. Management and Efficiency

To ensure efficiency, blockchain in automotive industry must have documentation, traceability and quality control. Blockchains simplify and organize financial transactions, order placements and other details to make management easy and efficient.

This allows suppliers and companies to make informed financial decisions and contracts can be executed without any errors or malice.

The blockchain will allow the company to stop payment and investigate if an order is incomplete, damaged, or misplaced. The system’s organized layout would show the exact layout of the original pieces, pointing out any modifications or manufacturing defects.

3. Cost-Effective

Blockchain’s outstanding management and security will reduce costs in departments such as audit, reporting, and reviewing. Additionally, there will be no intermediary involvement in financial transactions which will result in lower production costs.

The high efficiency of blockchain will allow for greater manufacturing capacity and maximize the use of resources. The blockchain’s digitalization and vehicle tracking will ensure that all regulatory requirements are met.

4. User-Friendly

Consumers will have complete transparency about vehicle history, source, and manufacture through digitalization with blockchain in automotive industry.

It will be much easier to verify, transfer ownership, and sell products, which would eliminate the need for tedious paperwork and increase the likelihood of fraud. A well-organized supply chain technology enhances the quality of goods while lowering cost of production.

5. Data storage

Blockchains are a platform that allows data to be stored, organized and interpreted without limitations. This is especially important in today’s locomotive industry, where electrification of cars will lead to self-driving technology.

To ensure passenger safety and vehicle functioning, extensive data must be stored. To ensure that no classified information about car owners is leaked, this data can be stored on blockchains. Vehicle performance may be optimized using data from sensors recorded on blockchains.

6. Optimizing The Supply Chain

The automotive supply chain is a critical component of the business. Blockchain in automotive industry can aid in the automation of long-distance manual activities. Blockchain technology may be used to optimize the whole supply chain as the firm expands.

Smart contracts are robust mobile applications that allow companies to automate a variety of manual tasks, save time and reduce costs. Smart contracts simplify many operations, such as managing customer data and validating ownership transfer documents.

7. Quality Control at its Best

There is always the risk of counterfeit spare parts when automakers are involved in larger distributed supply chains. These parts can be difficult to identify as they require additional resources and workers. Blockchain can help to resolve this problem and ensure that all parts are authentic.

Automakers can verify parts more easily by leveraging smart contrast, real-time identification and smart contrast. To ensure authenticity, individuals can match the hash ID with the previous hash code. This will save time and help scale the operations.

8. Auto insurance

Insurance companies can benefit from the Blockchain’s essential services. Manufacturers will be able to maximize their production utilization by using both the technology system as well as documentation of original thoughts.

Smart contracts are a way for a company to protect itself from potential problems and verify the processes that have been conducted by a car insurance company.

The Blockchain would allow insurance users to examine whether a car needs serious repairs before it occurs. This could be done by checking a vehicle’s technical issues or verifying any other data that the applicant has provided.

9. Vehicle Valuation

Blockchain technology has made it easier and more reliable to estimate a vehicle. Prior to the Blockchain application development, individuals could estimate vehicles using any data they had. This made it more difficult to detect fraud and biased estimates. The Blockchain system has made services visible and transparent as they are decentralized.

 

 

How can Blockchain be Used in The Automotive Industry

Let’s now look at how blockchain in automotive industry can be used to benefitted.

1. Securing Ethical Sourcing For Raw Materials

One of the core applications of blockchain in automotive industry is improving SCM systems. This provides assurance that natural resources used in production are manufactured responsibly and originate from trustworthy and secure sources. This tier of the supply chain requires robust know-your supplier solutions. Raw material suppliers can be difficult to track.

Barcodes and seals can be used to stamp shipments in order to verify that the material is from a reliable source. Chemical tracers are another technique quickly becoming popular in the industry.

Blockchain in automobile industry, may be used to document every stage of the supply chain and ensure that the paperwork is readily available, forged, and securely kept.

BMW Group, a German automaker, has pursued such blockchain-based pilot programs as part of its efforts for easy traceability of the mineral path.

RCS Global is another player in this space. RCS Global has partnered with IBM to create the Responsible Sourcing Blockchain Network. This platform has now moved beyond its pilot phase and includes founding members such as LG Chem, Ford Motor Company, Volkswagen Group and Ford Motor Company.

2. Vehicle Digital Passports

The buyer cannot be sure that the vehicle records are correct when it comes to the sale of a vehicle. This issue can be resolved by securely storing all vehicle history on a blockchain. This allows the user to easily verify the vehicle’s history and share information with other parties such as insurance companies.

3. Apps for Car and Ride Sharing

Blockchain in automotive industry has a remarkable characteristic. This is because it is dispersed and decentralized. It’s especially well-suited for supporting self governing ecosystems with wide-ranging scale and scope. This makes it ideal for creating new types of enterprise services and consumer services.

Blockchain technology, for example, can enable a new type of car sharing app development business that operates on a peer-to-peer network, eliminating the need for a middleman such as Uber. Smart contracts will govern transactions among participants in the network. Drivers will be paid once riders are delivered to their destinations.

The technology may also be utilized to manage car sharing between members of an organization or a community. This might eventually evolve to shared ownership systems in which community members pay a weekly or monthly rent for a service.

4. Platforms for Autonomous Vehicle Fleet Administration

Another strong argument for blockchain technology is autonomous vehicles. This technology may be used to create fleet management app development platforms that allow self-driving automobiles to connect and exchange data with other vehicles in a fleet.

The cars can log data about their daily activities such as mileage, complete routes, and any other issues. With blockchain, these systems may be adapted to match the demands of both commercial and private fleets.

Smart contracts and IoT can also help self-driving vehicles recharge their batteries at designated stations when they are not in use.

Blockchain in The Automotive Industry: Use Cases

The potential for blockchain technology to revolutionize every aspect of the automobile industry is immense. Its applications are extensive and broad, ranging from finance and manufacturing to regulation and distribution.

Here are some examples of its specific use of blockchain in automotive industry.

1. Virtual Documentation For Vehicles

The existing method makes it impossible to check the vehicle’s specifications. There is also the risk of falsified records. Buyers will be able to access reliable information about the vehicle through blockchain-based virtual passports.

2. Secure Digital Insurance

Blockchain-based technology allows for digital settlements and negotiation of insurance claims. Insurance companies can provide premiums with information about past driving records, vehicle condition, and past claims. This eliminates paper work and manual processes. This would eliminate the possibility of insurance fraud.

3. Car Sharing Services

Blockchain in automotive industry can allow for a decentralized car-sharing system where passengers can directly contact drivers, without intermediaries. Smart contracts allow drivers to be paid for riders who are dropped off at their destinations. This makes the transaction reliable and secure.

To ensure that an accident occurs, car sharing companies can keep track of the rental history via blockchains. Blockchain technology can be used to automate lease renewals and calculate fees based on usage.

4. Anti-counterfeiting Solution

The problem of counterfeiting can easily be addressed by limiting all participants to a single supply chain. All automotive supply chains can be connected to a common blockchain. This allows manufacturers to identify any limitations in their supply chain.

The “Internet of Things”, and Blockchain allow fraud parts to be tracked and identified. Their manufacturer can also be punished. Thus, investing in IoT can be beneficial to the automotive industry.

So if you want to build an automotive app based on IoT, it would be best to hire an IoT development company.

Blockchain: Major Challenges

The automotive industry could reap the benefits of blockchain technology. Automotive companies need to pay particular attention to certain aspects of blockchain technology as it is an innovative technology that enters the unknown world of automobiles.

 

1. Information Security

Blockchains in automotive industry allow all members of a system to access data under total transparency. It is important to protect confidential information from companies by setting transaction visibility settings to ensure privacy and prevent it being leaked.

2. Coding Standard

It is vital to ensure that smart contract codes are consistent and clear. Blockchain in automotive industry sets a high standard in code quality because major financial transactions depend on it. It is difficult and expensive to make amends after a smart contract has been established.

3. Subcontractor Commitment

It is crucial to make sure that all vendors and subcontractors are included in the blockchain-based platform when you move your business operations. A company can run its operations entirely without the external intervention of any vendors by having all their vendors on the blockchain.

How Will Blockchain Change The Automotive Industry? 

Blockchain technology has the potential to transform the automotive industry from the inside. Blockchain in automotive industry is a distributed, immutable, and transparent technology that benefits every step of the automotive value chain, including manufacturing, purchasing, distribution, and servicing.

 

 

1. Countering Counterfeiting

Blockchain-based technology solutions can make sure that everyone uses the same supply chain and minimize the chance of counterfeit parts.

Manufacturers can access information about the current inefficiencies within their supply chains by connecting them to a blockchain-based protocol.

The combination of blockchain technology and Internet of Things (IoT), can help to create a reliable track-and-trace system that can identify counterfeit parts on the average market.

2. Connected and Autonomous Cars

Lack of a reliable data management system is one of the biggest obstacles to fleet management app development. Blockchain technology ensures that users’ data is safe and self-driving vehicles can access the information to improve their navigation.

This data will be stored in a decentralized accounting format using smart contracts and blockchain. Effective data sharing will make connected car technology more efficient.

The blockchain’s decentralized ledger allows every node to the network, including every car and every data point, to have access almost instantly and more precisely to all data.

3. Vehicle History Management

Vehicle data, such as major repairs, accident damages, mileage, ownership records, and other information, may be stored using blockchain technology solution. This is the whole history of the vehicle, from its purchase to the present. These details can be verified by used car buyers to make sure that the vehicle is legal and has had no maintenance issues.

Sometimes, auto manufacturers will need to recall their vehicles. However, if you want to build a mobile applications for maintaining automotives, hire automotive app maintenance services.

Manufacturers may need to recall their vehicles in these cases. By tracking the vehicle’s history with a distributed ledger blockchain, manufacturers can quickly identify the vehicle and speed up the recall process.

4. Car Sharing

Car sharing allows for fast, real-time verification as well as payment processing. A car-sharing platform can be created using smart contracts and blockchain technology solution without the need for a central instance. Blockchain in automotive industry ensures that the car-rental history is unaltered.

This means that in the event there is an accident, the carsharing company will be able to see who was driving the car. Smart contracts are able to automate tasks like registering a new car lease and computing fees based upon actual usage.

5. Auto Insurance

Insurance companies can use a blockchain network to exchange driver behavior data. This will allow them to determine their premiums based upon accident and claim history. Blockchain can streamline the process of insurance contract negotiation and paperwork, which is a time-consuming and manual process.

The blockchain records cannot be altered and can be checked in real time, making it easier to identify fraudulent claims. The combination of IoT and blockchain simplifies claims management and increases efficiency in claims resolution.

6. Automated Payments

Automated payments include toll payments. This has made it much easier to commute and saved time by not having to stop at toll gates to manually pay.

All payments related to automobiles, such as ride fares and renewals of auto insurance, fuel purchases, parking fees, and many others, can be automated using technology— blockchain in automotive industry. This ensures maximum security and transparency. A vehicle can be used to conduct a transaction utilizing blockchain technology.

A smart contract is triggered, for example, when an electric car is charged at a charging station. The required quantity of money is transmitted straight to the service provider from the user’s bank account or digital wallet. For future reference, this transaction is stored in an immutable ledger.

Final Thoughts

Car manufacturers, insurers, and resellers have the opportunity to explore blockchain technology. However, very few companies have publicly stated their willingness to use their knowledge and apply it in their businesses.

Blockchain technology will make it easier for companies to comply with regulations by allowing them to use the blockchain in automotive industry. The blockchain in automotive industry can make it more efficient and trustworthy.

Although the technology solution is still in its infancy, it has great potential. It prepares vehicles for novel interactions with one another and with the environment.

So, in case you want to create scalable solutions in blockchain for your automotive business, hiring an AI Development Company will be beneficial.

 

Frequently Asked Questions

 

Q1.  How do You Develop a Blockchain App?

Although developing a blockchain app is difficult, it is possible with the help and support of a Blockchain Development Company. These steps will make the development process easier.

1. Develop the idea
2. Identify the blockchain platform
3. Proto development
4. Technology involved
5. Development

 

Q2. What is the Cost of Building a Blockchain App to Serve the Automotive Industry?

The Cost of Automotive Mobile App Development is on average between $25,000 and $50,000. This is an estimate. The final price can be affected by many factors, including the complexity of your project and the platforms you use.