<span style="font-weight: 400">Many industries can use Blockchain technology to streamline, including the automotive industry. With blockchain, automobile manufacturers can create and maintain tamper-proof records of important vehicle data such as who owns it, how it’s been maintained, whether there's been issuance of any recalls, etc. This information can be made available to the car owner, insurance companies, repair shops, and more without needing the manufacturer's consent or anyone else involved in tracking and monitoring vehicle data. In fact, in some cases, putting this information on blockchain technology would mean eliminating intermediaries and thereby lowering costs for all parties involved.</span>

<img class="aligncenter" src="https://securecdn.pymnts.com/wp-content/uploads/2021/01/automotive-industry-blockchain-vehicles.jpg" alt="Automotive Industry and Blockchain Technology" width="567" height="341" />
<h2><strong>The Current State Of The Automotive Industry</strong></h2>
<span style="font-weight: 400">The automotive industry has changed dramatically over time, but one thing has been consistent throughout its history: The role of middlemen. A centralized system facilitates a consumer’s transaction with manufacturers and dealerships and creates a barrier between car owners and their vehicles by placing unnecessary restrictions on them. </span>

<span style="font-weight: 400">As one of its foundational pillars, blockchain technology seeks to eliminate these third parties that often create barriers for customers. We’re talking about services like <a href="https://www.cryptoknowmics.com/news/uber-will-eventually-accept-crypto-as-payment-says-ceo">Uber</a> and <a href="https://www.cryptoknowmics.com/news/airbnb-could-soon-accept-payments-in-cryptocurrency">Airbnb</a> – companies that revolutionize their respective industries by eliminating unnecessary intermediaries between consumers and service providers. To remain competitive in today’s technological landscape, major sectors such as finance, healthcare, supply chain management, retail, and real estate must adopt blockchain technology into their existing systems or risk getting left behind.</span>
<h2><strong>Long-Term Benefits Of Blockchain Technology In The Automotive Industry</strong></h2>
<span style="font-weight: 400">The automotive industry is notorious for being slow in adopting new technologies. While companies are extremely innovative in a handful of sectors, some serious catching up still needs to be done when it comes to new technologies like blockchain. We can somewhat explain this by looking at Tesla’s struggle with implementing autonomous driving technology in their cars and car manufacturer <a href="https://www.porsche.com/" target="_blank" rel="nofollow noopener">Porsche</a> hiring a blockchain expert as their first-ever CIO. </span>

<span style="font-weight: 400">As technology continues improving and regulations and laws governing autonomous vehicles are put into place, companies need to start investing in new technologies like blockchain sooner rather than later if they want a piece of what promises to be an extremely lucrative market over time. In fact, experts predict that by 2030, more than 250 million self-driving cars will be on our roads. </span>

<span style="font-weight: 400">A lot has changed since we last looked at autonomous vehicle adoption numbers back in 2016—in just six years, we’ve gone from nearly 50% to just under 70% penetration among those who say they would buy a self-driving car right now or within five years (but not further out). And while these numbers seem encouraging on paper, they represent less than 2% of all light-vehicle sales. It will take decades before every single car on our roads can drive itself—and when that happens, we won’t even own most of them.</span>
<h3><strong>Vehicle Data Tracking</strong></h3>
<span style="font-weight: 400">There are many reasons why the automotive industry should adopt blockchain technology for vehicle data. Blockchain can help reduce these risks and keep a secure record of all car transactions despite the security risks associated with traditional methods. In addition, vehicles can grant temporary access to registered users, allowing the blockchain to record log data without tempering. This technology could even help the used car market. With blockchain data tracking, vehicle owners would see the complete history of each car they have an interest in buying. </span>

<span style="font-weight: 400">Using a blockchain-based system for vehicle data tracking can help reduce the risks involved in recalls. The system can track vehicle parts throughout the manufacturing supply chain, from the manufacturer to the end customer. The use of blockchain technology allows all stakeholders in the chain to trace a part and determine its authenticity. The technology can also help the automotive industry reduce the costs of recalls. With such a robust system, companies can also track the progress of a vehicle recall while keeping all relevant data on file.</span>
<h3><strong>Vehicle Insurance</strong></h3>
<span style="font-weight: 400">Insurers should consider the benefits of blockchain for vehicle insurance. Blockchain technology is an excellent way to improve processes that are inefficient today. For example, insurers can benefit from a new way to keep track of their policyholders' information and payments. It also reduces the need for intermediaries, such as insurance companies. But insurers should know the limitations of blockchain technology before they embrace it. It's not the end of the world.</span>

<span style="font-weight: 400">Blockchain can overthrow the current system of rules, requiring the consensus of all participating networks. However, the advantages far outweigh the challenges. Insurance companies must adapt to these challenges and come up with winning solutions. Blockchain can improve physical asset management and tracking and the insurance process itself. As a result, the technology can significantly reduce risks for consumers and insurers. To learn more about blockchain for insurance, visit the official website of the Technology Innovation Fund.</span>
<h3><strong>Vehicle Maintenance</strong></h3>
<span style="font-weight: 400">The advantages of Blockchain technology for vehicle maintenance are plentiful. Unlike traditional paper-based maintenance records, the data on a blockchain is immutable and cannot be changed. This is because multiple participants share the same blockchain, and there is no single point of failure. Also, the recorded transaction settles almost instantly, removing risk and friction from the process. In short, blockchain technology is a perfect place for data. As it has many uses in the automotive industry, adoption should happen as soon as possible.</span>

<span style="font-weight: 400">The decentralized data storage makes blockchain secure, making it almost impossible to hack into a single database. This decentralized data storage also prevents fraud and unauthorized activity. The use of blockchain technology for vehicle maintenance will make car maintenance more efficient and affordable by eliminating intermediaries. It will also eliminate manual tasks, simplify insurance claims processing, and streamline repair financing. By adopting this technology for vehicle maintenance, the automotive industry can benefit from various new and exciting applications. </span>
<h3><strong>Vehicle Security</strong></h3>
<span style="font-weight: 400">With the number of connected devices and lines of code on modern vehicles increasing rapidly, the automotive industry should consider blockchain technology for vehicle security. Blockchain technology is a decentralized, distributed system that enables the recording and settling of transactions almost instantly. As a result, it can protect connected and autonomous vehicles and their data from cyber-attacks. In addition, it can be a secure, reliable, and transparent means of data storage, exchange, and management. </span>

<span style="font-weight: 400">The automotive industry should consider blockchain technology for vehicle security for various reasons. For starters, it can improve trust between connected vehicles, a key factor in developing self-driving vehicles. Autonomous vehicles rely on big data, which must be processed instantly and acted on accurately. A blockchain can help in this regard. It also makes data more reliable because it can be stored and verified. Furthermore, it helps increase the security of connected vehicles since connected cars form a distributed system of cars. Secondly, blockchain can protect vehicles from hackers because it is much harder to hack a blockchain than a traditional database.</span>
<h3><strong>Vehicle Development Timeline</strong></h3>
<span style="font-weight: 400">The benefits of adopting blockchain technology for vehicle development cannot be overstated. For instance, an integrated black box and blockchain client can make it easier to maintain the history of a vehicle's mileage and time stamp. However, such a system will require the vehicle to have internet connectivity, which may not always be possible. In these cases, a prototype with simulated black boxes is necessary. In addition, vehicles with internet connectivity should be able to store mileage data on the blockchain.</span>

<span style="font-weight: 400">Another use of blockchain in the automotive industry is in servicing a vehicle. An individual or fleet of cars can lease out their autos to drivers with the technology. It is also possible to share vehicle data and service histories. In addition to this, it is useful in financial services and supply chains. It is also useful in sharing drivers’ data. As the automotive industry continues its journey towards autonomous, connected, and electrified vehicles, blockchain technology can help speed up the process.</span>
<h2><strong>The Future Of Car Ownership</strong></h2>
<span style="font-weight: 400">The average American household has 2.3 cars, which can cost tens of thousands of dollars over time. But a trend is emerging in which people prefer sharing instead of owning—whether it's shared cars, car-sharing services like Zipcar, or ride-sharing companies like Uber and Lyft. All signs point to an industry where people don't buy cars. Instead, they simply use them on demand when they need them. It sounds futuristic, but it’s already happening, which could be very good news for blockchain startups. Startups that want to help people move around on-demand will find themselves well-positioned in a world without car ownership as we know it today.</span>

<span style="font-weight: 400">By eliminating many of the costs associated with owning a vehicle, such companies could potentially offer on-demand driving at far lower prices than what most people pay today. And by taking advantage of blockchain technology, these businesses could also make sure everyone is paid fairly. This is because blockchain offers a transparent way to track who owns what and how much each person contributes—or takes away—from every transaction made using digital currency or tokens (the virtual kind). In addition, by creating distributed ledgers between all participants in any given transaction, blockchain ensures that all transactions are recorded accurately. Hence, there’s no confusion about who owns what part of any given asset or service.</span>

Why The Automotive Industry Should Adopt Blockchain Technology

Blockchain technology has been widely used in several other industries. Interestingly, it has a wide range of use cases in the automotive industry

Oluwademilade Afolabi is a freelance writer and editor passionate about blockchain technology and the health industry. He is a 6th year medical student, and has worked with various companies and blogs since the blockchain revolution began.

Why The Automotive Industry Should Adopt Blockchain Technology

Top Picks