Although blockchain has been subject to more hype than actual in-production applications, the technology has undergone rapid developmental steps in recent years. Blockchain technologies offer auto manufacturers, as well as numerous other players across the automotive ecosystem, a range of potential benefits.
While there are many potential use cases, we’ll examine five where blockchain could potentially impact the automotive industry:
- Internet of Things – A shared ledger between automotive OEMs, parts distributors, dealerships, service mechanics, insurance providers, and others could support the ability for parts or equipment within a car to autonomously sense its own needs. For instance, a car could advise the driver about the need for repair, contact remote users for updates or nearby suppliers for replacement parts, negotiate pricing and appointments for service and repairs, authenticate the proper technician, and process the respective payment for services.
An early example of blockchain supporting transparency across the above interactions was recently announced by Renault. The French automaker is piloting a digitized car maintenance program, which uses blockchain as a shared ledger to log all car repair and maintenance history in one place.
- Financing – Typical auto financing includes a host of verification steps to which blockchain could be applied for efficiency gains: customer bank validation, issuing letters of credit, review of multiple documents sourced from different locations, scoring and classifying risk; archiving of reviewed documents, etc.
- Title Transfer – The process of transferring car ownership requires numerous middlemen to execute. Blockchain could streamline this process, not only by digitizing and securing titles – many titles today are paper-based – but by expediting the time needed to authenticate, validate, and transfer ownership of specific assets.
- Insurance Claim Processing – Entering claims on a distributed ledger could streamline both claims processing as well as subsequent payouts and service contracts associated with financing and executing repairs. Automotive OEMs could potentially use blockchain technology to streamline the filing of certain insurance claims, automatically deploy service technicians, or automate payout.
- Supply Chain Management – The automotive supply chain is incredibly complex, consisting of numerous types of parts, hardware, software, and firmware suppliers, distributors, dealers, regulatory agencies, insurance companies, and more. Blockchain technologies can be applied to each phase of the supply chain and expedite the entire process. In May, 2017, Toyota Research Institute (TRI) unveiled a three-pronged strategy in which they see blockchain accelerating the development of autonomous driving technology.
These are just a few examples of how blockchain can impact the automotive industry. While auto manufacturers still could control what services are offered, blockchain would ensure that transactions are executed fairly and transparently. Who wouldn’t welcome more fairness and transparency in automotive? 😉