Blockchain for Сonnected Сars: a New Era for the Automotive Industry

Top 6 uses of blockchain for connected cars

Shared ledgers have many applications for the automotive industry, and the list just keeps getting longer. For now, let’s take a look at the six most common benefits blockchain solutions can have for the automotive sector.

1. Making in-car payments safer

The number of cyberattacks registered on connected vehicles was seven times higher in 2019, compared with data from 2016. This raises security concerns among both drivers and OEMs. A distributed ledger – blockchain – helps safeguard data from hackers using the highest level of security currently available. Once data is validated and added to the block, it becomes nearly impossible to alter it.

On the back of this revolution in security, some car manufactures have announced the introduction of in-car payments. In-vehicle e-wallets will allow motorists to make transactions without getting out of their car. Honda, for instance, has developed a suite of apps which enable users to make reservations, purchase movie tickets and far more, via the vehicle’s navigation system.

There is, however, concern over the safety, security and usability of these futuristic payment technologies. Blockchain solutions can make in-vehicle financial transactions more secure and ensure that payment reaches the recipient. Smart contracts, which run on the blockchain, can transfer an amount of money from the user’s account to a recipient’s, in order to charge the car or pay for parking and insurance, etc.

2. Increasing visibility of the supply chain

Automotive parts are frequently counterfeited. Car tire manufacturers lose nearly €2.2 billion a year, and car battery manufactures, up to €180 million, on account of fake automotive components. Aside from the financial losses incurred by genuine manufacturers, counterfeit parts pose an enormous danger to drivers. In India, 20% of accidents are caused by fake automotive components.

The transparency offered by blockchain allows car components to be tracked from the manufacturer to the supplier and then the end-user. Using a distributed ledger helps prevent data manipulation and verifies the authenticity of vehicle parts, since every action and movement is recorded throughout the entire journey – from manufacturing to purchase.

3. Streamlining the vehicle recall process

According to the Automotive Defect and Recall Report, 28 million vehicles had to be recalled in 2018. Recalling vehicles is a complex and expensive process, which blockchain can improve. A blockchain-based record helps identify only those vehicles which need to be recalled, minimising both the costs for manufacturers and the inconvenience for drivers.

By putting data through a blockchain-based protocol, each car part obtains a unique identity number which is recorded and traceable in the ledger. Manufacturers are able to store data about their products and, once a vehicle has to be recalled, those with faulty components can be easily found.