“Blockchain and related trust enhancing technologies are poised to redefine the automotive industry and how consumers purchase, insure and use vehicles.” — Chris Ballinger, former CFO and Director of Mobility Services at Toyota Research Institute and current CEO and Chairman of Mobility Open Blockchain Initiative (MOBI).
When it comes to vehicles, one of the most common consumer complaints is the lack of transparency. From uncertainties about whether a dealer is offering a fair purchase price to mistrust about rising insurance costs and questions about recalls and service requirements, car owners are largely kept out of the loop when it comes to the details about their vehicle.
One of the many benefits derived from adopting blockchain in the auto industry is the potential to make everything transparent and accurate to not only the consumer but to every participant in the complex vehicle supply chain.
The core principle is beginning the entire process with a blockchain-driven smart contract, thereby ensuring that every recorded transaction related to a vehicle’s digital assets can be verified at all times moving forward. Each new transaction is initiated and regulated by the smart contract, which can automatically execute based on predefined conditions.
With connected cars shipments estimated to hit 64 million units by next year, combined with the overall increase in vehicles around the world, the need for advancements in the management of global transportation is paramount. And expectations for the proliferation of autonomous cars in the not-too-distant future adds to the potential efficiencies that can be obtained through the extensive use of blockchain in the auto industry.
Smart contracts carry the ability to be embedded into manufacturing blockchains to enable the automatic release of purchase orders at various stages of the process, in addition to the potential to approve buyer financing based on smart contracts that evaluate credit ratings without the need for any human intervention. The removal of the “middleman” in these and other scenarios makes it possible to save massive amounts of time and money, while simultaneously improving data accuracy and enhancing access to vital information.
Blockchain is the perfect solution to many of the challenges that exist in the transportation sector. From leasing and vehicle financing to carsharing, digital service records, and keyless authentication, blockchain-driven smart contracts hold the potential to resolve countless issues in the current and future automotive industry.
Written by Igor Ilunin, head of IoT at DataArt.