Blockchain’s big impact on the automotive industry

The automotive sector is one of the driving forces in the global economy. Blockchain is proving to be a powerful technology that can drive the automotive industry forward. Today’s vehicle is not seen as just a means of transport. With unprecedented innovations such as autonomous cars and electric vehicles, traveling has become easier and easier.

Automotive blockchain is a decentralized database used to keep track of car-related data. The modern vehicles move data centers with built-in sensors and computers that capture information about the vehicle. Car-related data stored in a blockchain is authentic and cannot be tampered with by the system users. The blocks used to keep track of the data are linked to each other using cryptographic principles. This is useful for protecting the data against leaks and manipulations, making the data safer, more secure and more accessible to customers. Public blockchain balances are primarily autonomously managed and used in peer-to-peer networks for data exchange between related parties.

In addition, automotive blockchain brings a number of benefits to the local transportation system. It allows transactions to be carried out using the digital currency Bitcoin. Blockchain technology facilitates carpooling, helps lower costs and reduces risk by introducing new business models in transport systems. It reduces operational costs in the automotive industry, as it eliminates the need for a dedicated person or third parties to keep track of all processes, sales, insurance and warranty claims, etc. This technological innovation boosts new ways to increase collaboration between stakeholders such as governments, infrastructure owners, commuters, local and national authorities, etc., involved in the transport systems.

Also, blockchain-powered solutions are useful in reselling cars, as they provide used car buyers with all the necessary information about maintenance, quality testing, failure patterns, etc. of the car. They can also help unlock the full potential of other advanced technologies such as 3D printing, augmented reality, artificial intelligence and IoT, thereby delivering significant value to industrial companies.

According to a report published by Allied Market Research, the global automotive blockchain market is expected to reach $5.6 billion, with a significant CAGR from 2021 to 2030. Europe currently dominates the market with the highest market share and is expected to witness the fastest growth rate in the forecast period. All the major car companies, including BMW, Audi, Toyota, Tesla and others, use blockchain.

However, the outbreak of the COVID-19 pandemic had a negative impact on the growth of the global automotive blockchain market. There was a sharp decline in sales and production of vehicles, due to the implementation of the strict lockdown, travel restrictions and social distancing norms across the world.

Nevertheless, the rapidly growing need for transparency and immutability in the automotive ecosystem is playing a significant role in the growth of the global automotive blockchain market. Various other factors, such as reduced operating costs, protection against data leaks and manipulations, higher usage for better payments, usage-based insurance and transport and logistics, are increasing the growth of the market to a great extent.

With this operation on board, a number of automotive companies operating worldwide have made innovations and developments in automotive blockchain, thereby enhancing the market’s growth even more. The market players have understood the importance of blockchain adoption to improve transportation and are thus focusing on offering a variety of services to vehicle users.

For example, Cruise LLC has planned to use blockchain to collect data from car sensors and develop a reliable map for autonomous vehicles. At the same time, the BMW Group has used blockchain to ensure the traceability of components and the collection of raw materials in the international supply chain process. Renault has chosen to use blockchain technology for its supply chain needs. In the same way, Marelli Automotive Lighting, using blockchain technology, has strengthened the supply chain for the automotive industry.

Furthermore, several startups such as Xain, NXM Labs and others have gained experience in the automotive blockchain, thus increasing the trends in the automotive blockchain worldwide. Although blockchain technology in the automotive industry is still not very popular according to current demand, it has the potential to enable the automotive industry to leap forward into the new era of smart vehicles. Here, it is worth mentioning that the global automotive blockchain market has a huge potential to gather enormous growth in the coming years.