The car manufacturing sector is currently being revolutionised – and would you believe it, it’s blockchain. Well, if you ask Elon Musk and his self-driving AI/blockchain-powered Tesla cars, he would believe it. Although, maybe don’t ask him about his Tesla car that exploded recently.
Anyway, we digress. Blockchain technology is making the impossible dream into reality. Blockchain technology and cryptocurrencies are just so much more accessible than they were. In fact, how and where to buy Bitcoin and crypto with a credit card in 2024 was simpler than ever. And sometimes, you’d walk around the corner and see a Bitcoin ATM.
We digress again. Read on to find out how blockchain technology is transforming the automotive industry.
Enhanced Supply Chain Transparency
Automotive supply chains are quite complicated because they involve many suppliers, manufacturers, and distributors. Supply chain nightmares are common in the automotive industry.
With blockchain, all participants in a transaction can use the single shared ledger, a fully decentralised blockchain technology. This transparency means that every stage of the production process, starting from the raw materials and finishing with the manufactured elements, is fully visible.
As an example, blockchain can make it impossible for scenarios to exist in which fake components enter a supply chain. Components that are counterfeit endanger public safety and cost car companies billions of dollars annually.
Since blockchain automates transactions and eliminates manual documentation, it further increases efficiency. This translates to quicker deliveries, reduced mistakes, and lower costs for manufacturers and consumers.
Secure Vehicle Histories
It may appear that buying a pre-owned car is a game of luck. Is the odometer true? Has the vehicle been involved in any crash? Using blockchain helps to address this problem by giving each car an electronic “digital passport”. This record is unchangeable, and it contains all the information necessary—from the specifications, through the work performed on the vehicle, to the accidents.
For example, VeChainThor is developing vehicle passports based on blockchain technology. The transparency in information about the used car market also reduces the level of fraud and increases trust in the automotive industry.
Revolutionising Autonomous Vehicles
Self-driving cars will have enormous volumes of data. Whether it is location tracking, real-time processing, or decision-making, these vehicles are going to require secure and efficient systems to function. Using blockchain technology adds immense value in facilitating the proper management of these large quantities of data.
With blockchain, even cars can exchange data with public infrastructure and other service providers securely. Take, for example, a self-driving vehicle that can autonomously transact with toll gates or charging points, facilitated by smart contracts on a blockchain network.
Blockchain technology has also entered the sphere of peer-to-peer car-sharing models because of its capability to manage transactions securely and be transparent in all locations of rented vehicles.
Optimised Manufacturing Processes
In manufacturing, blockchain technology assists in the improvement of quality control measures and traceability. The entire supply chain, i.e., the entire production cycle, can be validated and recorded on the blockchain network, guaranteeing compliance with set standards. In the event of a defect arising, companies can trace where the issue originated from with speed, lowering the recall cost and time to fix it.
An interesting case in point is BMW, which has been utilising the technology in the manufacture of its vehicles, working on a blockchain that tracks the use of raw materials in production. By controlling how materials are sourced and how they are manufactured, automobile manufacturers can gain the trust of consumers and reach self-imposed sustainability targets.
Also, blockchain accelerates the exchange of information among manufacturers and suppliers. Among the new functions that smart contracts allow is the automation of payments and deliveries, minimising the chances of being delayed and any disputes arising.
Improved Customer Experience and Loyalty Programs
Automotive manufacturers consider customer data as their major asset. However, protecting it always proves to be a challenge. Here, blockchain comes into play (again), informing customers that their data is safe as all data remains secure behind various encryption solutions.
That type of encryption isn’t the same on standard systems. As a result, auto manufacturers can provide customers with a range of services tailored to them, for example, making reminders about maintenance or sending out special offers.
Finally, there are many opportunities for loyalty programs based on blockchain. Customers earn and redeem points in a transparent and tamper-proof system, making the process simple and engaging.
Securing Connected Vehicles and IoT Devices
There are a growing number of connected cars and IoT devices that are making the battle for online security even more difficult. Where Blockchain technology comes in is that it has a distributed structure that helps in solving that issue, offering a reliable environment for the exchange and storage of information.
An example of this would be how blockchain enables makers of connected vehicles to guarantee the authenticity of software updates against changes. Blockchain also allows safe interaction between vehicles and roads, which would help in making traffic management easier and also makes roads safer. With smarter and more connected vehicles coming, this additional layer of security is necessary.
Blockchain technology is not just a hype – especially for the automotive industry. It’s almost at a point where the system wouldn’t run (or at least wouldn’t run as efficiently) without blockchain technology. Let’s see how it’ll advance in 2025.
