The automotive industry is already experiencing disruption by all vehicles electric, autonomous and connected. Fundamentally, these technological innovations are changing current perceptions of the automotive industry. With all these innovations and disruptions already happening, here comes another new kid on the block to further ruffle the industry’s feathers— blockchain. By Jessminder Kaur
A majority of the general public has been under the misconception that blockchain technology is only utilised in the financial sector, but that could not be farther from the truth. Bitcoin is just one instance where blockchain technology is incorporated and that use case is not the only one. Blockchain has permeated the automotive arena and will certainly change the industry altogether.
The most notable and anticipated advancement in automobile tech is undoubtedly self-driving cars. As manual driving slowly goes out of fashion and our roads boom with more autonomous commutes, our automobiles and lives will be subjected to greater data accumulation. Some of the benefits of blockchain delineated below can ensure that buyers can place their faith in a vehicle’s data, and drivers own their data, and manufacturers can swiftly recall and substitute defective equipment.
Authenticity Of Parts
Fake auto parts that are bonafide in appearance often wriggle their way into the supply chain and end up in the service centres of dealers. These second-rate parts frequently malfunction soon after installation, causing damage to the automaker and part supplier brands. To battle this fraud, automakers have armed themselves with layers of anti-fraud technologies and operations, but somehow phony parts were always capable of trickling into the supply chain nevertheless.
Blockchain can address this problem with the creation of a 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 as a layer to bolster authenticity protection.
Infrastructure Of Electric Cars
Following the growing rampancy of electric cars, they will be reliant on a new machine-to-machine (M2M) infrastructure that encompasses charging station owners, energy providers, parts suppliers, automakers, and car owners. No single enterprise can manage the intricacy to bring stakeholders together, and ideally, no one entity should hog the platform, which would undesirably give rise to a monopoly.
A popular yet 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.
Assuming the bank gets wind of this, immediate action will be taken against the dealer. However, because the car was sold through legal means, the bank would have no right on the vehicle whatsoever. Concurrently, the financing to the dealer would have been spent and must be written off.
With openness of access to data, the asymmetry in information that allows this practice to be executed is eliminated. Blockchain facilitates instant transparency and gains value as more stakeholders opt in.
Even while some are starting small, many are fascinated by the future as imagined with blockchain. This fascination could exponentially push blockchain technology into the mainstream narrative, since so many people, millennials in particular, are taking serious interest in electric cars for the positive environmental impact they make.