One of the newest entrants in the line of disruptive technologies, Blockchain, is fast becoming indispensable for various industries including the automotive industry. The utilization of blockchain for the automotive industry is highly advantageous as it brings together multiple players of the complex ecosystem on the same page.
The automotive industry is not only the most technologically advanced industries in the world today, employing AI, IoT, and digital twin towers, it is also the one showing maximum growth. With nearly every household in the middle-class bracket either owning a car or desiring to own one, automobile makers must play smart to cater to the ever-evolving demands of the market Blockchain being a decentralized and distributed public ledger data can be utilized to address the pain points of the automotive sector in the most efficient way.
Here’s what Blockchain for automotive industry can accomplish:
Future-proof technology design: With the growing need for automation in cars and with devices communicating with each other via IOT, these interactions need to be secure, incorruptible and permission-based Highly licensed access. Therefore, blockchain can act as a bridge between parts distributors, original equipment manufacturers, dealers, mechanics, etc. Furthermore, it can automatically notify users about the requirement of a new component. It is also possible to contact and negotiate with mechanics and spare parts suppliers.
According to a report by Frost and Sullivan, by the end of 2025, 10 to 15% of connected vehicle transactions are expected to take place on Blockchain. An example of this is blockchain-enabled toll booths, where Tesla vehicles automatically initiate payments as they pass through blockchain-enabled toll booths.
Ensuring greater transparency among all stakeholders: In the automotive industry, many parties are involved right from design, manufacturing, distribution, sales, financing and service activities. A blockchain-based system will ensure greater transparency and more accurate information processing. Therefore, all processes involved in the production process from start to finish will be accelerated.
Reducing Paperwork: As there are multiple parties involved in the supply chain, there is also a great deal of paperwork. Smart contract functionality and peer-to-peer open network of Blockchain reduces the amount of paperwork by automating the processes based on pre-set terms and conditions.
Eliminates the Risk of a Centrally-located Data: One of the major advantages of blockchain is secure data sharing. Since, data gets ignored among multiple participants of the supply chain, the control doesn't remain at the hands of a single player. Moreover, once the data is uploaded on the Blockchain, it remains immutable and is tamper-proof.
supply chain, from the suppliers of various software and hardware parts to distributors, dealers, insurance companies, etc. Regulatory agencies, which dictate the kind of emission, and other such laws are also involved in the supply chain and logistics.
Supply Chain Management: In the automotive sector, ensuring optimal supply chain management is difficult. From handling raw materials to managing the shop floor, maintaining an optimized inventory, and making payments to all concerned, there is a lot of work involved which can be regulated and streamlined with the incorporation of a blockchain-based solution in the supply chain.
Preventing Counterfeiting of Parts: Like the pharma sector, the automotive sector is also besieged by the problem of fake/counterfeit parts. Despite tough measures, and installation of anti-fraudulence devices, these parts somehow end up in the supply chain. This concern can be mitigated by the use of a Blockchain based system where the entire journey of a product right from its point of origin to the end-consumers can be tracked.
The Way Ahead: There are endless possibilities for blockchain-enabled technologies in the automotive industry presented besides providing increased transparency across the supply chain, it helps businesses streamline their processes while reducing the complexity, as well as the cost of doing business with multiple parties.
Facilitate Payment Processing: The processing of payments is not only lengthy and time-consuming but could be misdirected as well. Blockchain-based payments and contracts transfer can accelerate the process of reconciliation of any deal and also enable the transfer of pecuniary and other material assets from one party to another seamlessly.
