The automotive industry is undergoing radical change as vehicle connectivity, autonomous vehicles, electric vehicles and ridesharing remake the transportation landscape. Automakers are racing to innovate and define market leadership with designs driven by purpose, while transforming from original equipment manufacturers (OEMs) to original service providers (OSPs).
As the car transitions into a “computer on wheels” – enabling digital transactions and data monetization – security and visibility are becoming a preeminent challenge across the value chain.
Blockchain is emerging as a technology that supports secure execution and validation of peer-to-peer digital transactions, such as payments, via a distributed ledger system that maintains trust through immutability of records, enhanced transparency and increased supply chain visibility and traceability. Although blockchain has transcended experimentation in industries such as financial services, the exploration of use cases within the auto industry is relatively recent.
Paving the Way for Blockchain
For the auto industry, blockchain offers an exponential increase in transactional and interactional trust and data security (via strong public key infrastructure encryption), as well as real-time insight across the entire value chain. When coupled with advanced analytics, blockchain can strengthen predictability and intelligence to support advanced decision making.
Recently formed industry partnerships like the Mobility Open Blockchain Consortium (MOBI) are paving the way in promoting standards and accelerating the adoption of blockchain, distributed ledger and related technologies via a collaborative approach to developing industrial solutions. MOBI’s members include leading blockchain and technology start-ups, auto OEMs, technology companies, academic institutions and non-governmental organizations (NGO).
Vehicle identity is the core use case that is often a prerequisite and an enabler for a wider range of applications that can address industry challenges in downstream processes such as vehicle financing, insurance, vehicle payments, etc. Transparency in supply chain processes, such as managing the traceability of quality issues and defects, can be enabled by blockchain. Mechanisms supported by blockchain can allow for tracking every sale, service, modification and refurbishment, enhancing overall accountability by all players in the automotive supply chain, even end customers. Analytics on this kind of traceable information can also allow for timely prediction of major warranty issues, significantly reducing expenses on recall campaigns for auto OEMs.
Platforms and Marketplaces
In an age when digital and data are king, the mobility sector is working to find new ways to manage, share and monetize electronic information. Digital marketplaces bring together an ecosystem of players to contribute data, insights, apps and services to exchange value-added services. Such marketplaces can support information ownership/protection, disbursement of revenue/gains and dynamic management of contracts/alliances, without any direct or regular intervention from intermediaries.
Platforms that enable real-time tracking and sharing of assets without the need for control by intermediate parties allow for open market pricing and competition. These platforms can also enable dynamic contracts and the persistence of traceable information for auto-arbitration, if necessary. Services by multiple ecosystem players such as transporters, maintenance service providers, parts suppliers, insurance companies and finance companies, among others, can be enabled through blockchain networks, which operate on collaborative and democratized platforms, resulting in benefits to end customers and ecosystem players.
In addition to creating new revenue opportunities for electric vehicle (EV) manufacturers, utilities and charging infrastructure providers, digital marketplaces could also enable new ways for consumers to participate in the EV ownership and charging ecosystem. E-mobility ventures such as eMotorWerks have explored distributed marketplaces (described as “Airbnb for EVs”) to support peer-to-peer charging models via a public Ethereum blockchain transaction layer.
Such platforms would allow charging station or home owners to rent out time on their stations to EV drivers participating in the network and receive payments or carbon credits for the service via digital tokens, regardless of the make/model of the car or electricity provider.
As automobiles become a means of delivering a new mobility experience for customers, the concept of a car will evolve into a bundled offering comprised of value-added services that not only extend product capabilities but also significantly enhance the lifestyle of end customers.
Note: Cognizant is a member/partner of the MOBI consortium, actively supporting the application of blockchain across a variety of use cases, solutions and roadmaps for solving mobility-oriented business-technology challenges.