If you thought last year, 2018, was an exciting year for the automotive industry, then put your seatbelt on for 2019. There are many factors weighing in on the future of auto makers and vehicle trends for this year. Like any industry there is a series of challenges expected with growth and change.
Blockchain? Who said Blockchain?
Your powertrain controls are shipped to assembly from Kariya-Aichi, Japan; your fuel systems arrive in bulk from Levallois Cedex in France; your aluminum cylinder heads are trucked up Interstate 35 through Laredo out of Monterrey. How can you assure, every step of the way, that the parts you ordered are the parts that get delivered? Counterfeit or otherwise faulty parts can fail on the highway, with catastrophic results. Millions of dollars could be lost in the upfront cost of recalls and damage to your reputation.
Well, a super-hot technology now getting intense attention in the tech space is blockchain. In the automotive business, where the supply chain — with all its potential for counterfeit parts and related issues — is so important, blockchain technology can create a trusted, accurate protocol for this supply chain.This establishes a system of checks and balances for the whole supply chain community, with cloud servers validating and recording everything.
Blockchain technology, the foundational infrastructure of the cryptocurrency Bitcoin, is a timestamped ledger of transactions distributed over a network of computers. If each auto part were assigned a unique code, blockchain would enable auto manufacturers to track each step of the production and transportation process through a secure database updated by suppliers in real time.
Writing for Car Tech, Movimento’s CTO Mahbubul Alam argues that the adoption of blockchain technology in the automotive supply chain can significantly reduce supply chain risk. Each part with its robust digital identity is visible in this tracking system. The OEM and suppliers have encrypted records within the ledger, which makes it easy to identify an incorrect or fraudulent part. No other approach creates such an open, all-in-one system that establishes trust and identity without intervention.
With blockchain, the murk of time and distance would be dispelled; the entire process all at once would become visible. Not only would manufacturers be able to respond more quickly to disruptions and streamline their supply processes with access to this information, they would also be able to guarantee all their parts are one hundred percent safe as tested.
2. Example of a smart idea:
Smart contract and Connected Vehicles
One interesting application of Blockchain is the use of smart contracts. A smart contract is an agreement between parties that is posted to the Blockchain. These agreements can be between peer-to-peer (P2P), person-to-organization (P2O), and person-to-machine (P2M).
Using a Smart Contract on the Blockchain, I have given the car the permission to share data with the manufacturer (in return for discount maintenance), my insurance company (in return for a discount), other vehicles in the manufacturer’s eco-system (in return for a micropayment), public infrastructure, basic safety information with other vehicles, and police and emergency vehicles. This information is encrypted and secure on the shared ledger the Blockchain creates. However, I will not share commercially useful information with other vehicles unless there is a reward. For example, my GM vehicle will not share information on how many miles I drive daily or where I go with a Ford vehicle unless I receive a payment from Ford.
My vehicle could also trade information with other entities. In Figure below, my car communicates with a store to exchange data. As can be seen, in return for a micropayment or coupon or discount, my car gives certain information to the store and records the transaction on the Blockchain’s shared ledger.
3. Blockchain-based automobile “eWallet”
German auto engineering firm ZF Friedrichshafen AG, along with Swiss banking giant UBS and the innogy Innovation Hub recently announced that they have built a blockchain-based automobile “eWallet,” and are planning to field-test a car with the eWallet in 2017. “The Blockchain Car eWallet makes it easy to pay for charging electric cars,” ZF stated in their Announcement. “The electronic wallet can even be used to pay for highway tolls, parking fees or car-sharing.”
While there is no mention of a cryptocurrency, “users can easily transfer money online from a PC or a dedicated mobile app.” However, the design requires a blockchain that allows instant and secure, peer-to-peer microtransactions. Without the blockchain, ZF and partners state that some of the technologies they have in mind for future consumer and commercial cars wouldn’t be feasible.