Vikrant Singh Gautam is a seasoned professional with extensive expertise in innovation, GTM strategy, sustainability, digital enterprise, and the startup ecosystem. His career spans industry giants such as Maruti Suzuki, Deloitte, and TCS. Recently, he has deepened his knowledge by earning a certification in blockchain technology. In this guest post, Vikrant shares his insights into how blockchain is transforming the automotive industry and provides key considerations for its adoption.
Imagine a world where your car can communicate with traffic lights, pay for fuel automatically, and even drive itself—all securely and transparently. This is the promise of blockchain technology in the automotive industry. From enhancing vehicle management to ensuring supply chain transparency, blockchain is set to revolutionize the way we interact with our vehicles.
Blockchain technology has dramatically transformed various sectors by providing decentralized, secure, and transparent solutions. For example, in finance, Ripple is revolutionizing cross-border payments, making them faster and more cost-effective. In digital identity, SelfKey ensures secure identity verification, reducing fraud risks. The logistics sector benefits from VeChain, which offers a decentralized platform for efficient coordination. Even the food industry leverages blockchain, with Walmart ensuring food safety and traceability by tracking the origin and journey of food products to guarantee their safety.
The automobile industry is no exception. Blockchain is being harnessed to enhance vehicle management and supply chain transparency, among other things. For instance, in collaboration with the Berlin-based startup XAIN, Porsche tested blockchain-based technology for vehicle transactions, enabling app-based locking and unlocking, as well as temporary access authorizations. Additionally, the Mobility Open Blockchain Initiative (MOBI), a consortium of 37 major automotive and technology companies, including Ford, BMW, General Motors, and IBM, is driving innovations in the automotive blockchain space.
The Dominance of Private/Permissioned Ledgers
The World Economic Forum released a white paper, Blockchain Beyond the Hype – A Practical Framework for Business Leaders, intended to assist senior decision-makers in evaluating whether to deploy resources to explore a blockchain-based solution to a given problem and, if so, at what scale. The paper enables rapid initial analysis of whether blockchain is an appropriate solution for a defined problem. While analyzing the use cases based on that decision tree, most emerging use cases fall under the category of private/permissioned ledgers.
Real-World Applications
- BMW Group: By leveraging blockchain technology, BMW ensures the traceability of components and raw materials in its international supply chains. This tamper-proof data sharing optimizes processes and enhances transparency.
- Daimler: In collaboration with Riddle & Code, Daimler is developing an open car hardware wallet. This innovation supports autonomous vehicles, the secure exchange of real-time traffic data, and interaction with smart city initiatives.
These ledgers restrict participation to authorized entities, ensuring that only trusted participants can read or write data, which is crucial for industries such as finance, healthcare, and automotive. They are often managed by consortia, which provide a tailored governance model and ensure compliance with regulations such as GDPR. Efficient consensus mechanisms in permissioned blockchains lead to faster transaction processing and improved scalability.
The Potential of Public Ledgers
While private ledgers dominate, public ledgers also hold potential in the automotive industry. Public ledgers are open to anyone, providing transparency and decentralization. Emerging use cases include:
Emerging Use Cases
- Vehicle-to-Everything (V2X) Communication: IOTA’s public ledger enhances traffic management and road safety through secure V2V and V2I communication, creating a digital twin of the car for lifecycle event recording and fraud prevention.
- Digital Vehicle Passports: Public ledgers store comprehensive vehicle histories, increasing transparency and trust in the used car market.
- Open Charging Networks for EVs: Public blockchains facilitate decentralized charging networks, promoting interoperability and easier access to charging stations.
- Decentralized Ride-Sharing Platforms: Public ledgers support peer-to-peer ride-sharing services, reducing costs and increasing transparency.
Private and public ledgers have distinct technical differences that influence their application in the automotive industry. Private ledgers offer controlled access, enhanced security, and compliance with regulations, making them suitable for sensitive data management. Public ledgers, on the other hand, provide transparency and decentralization, making them ideal for applications requiring broad participation and trust.
Future Prospects
The automotive blockchain market is set for remarkable growth, projected to surge from $468 million in 2023 to over $7.3 billion by 2032. This exponential growth underscores the transformative impact blockchain technology is poised to have on the consumer automotive industry.
Current Projects
- BMW Group’s PartChain Project: BMW Group’s PartChain project ensures seamless traceability and data transparency in supply chains using cloud (AWS, Microsoft Azure) and blockchain technologies.
- Porsche and XAIN Collaboration: Porsche and XAIN are testing blockchain applications in vehicles for secure, fast transactions. This includes vehicle locking and unlocking via an app, as well as temporary access and encrypted data logging for new business models.
As blockchain technology continues to evolve, its impact on the automotive industry will only grow. With applications ranging from secure vehicle transactions to decentralized ride-sharing platforms, the possibilities are endless. Are we ready for a future where our cars are not just vehicles but intelligent, autonomous entities?
By Vikrant Singh Gautam
Innovation Manager at Maruti Suzuki, driving startup programs and technological advancements in the automotive industry
