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How to View the Innovation of Future Technology - Blockchain in the Automotive Industry

ERIC is a news writer with a passion for the automotive industry and blockchain technology.

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The automotive market of the future will be very different from today – a market that is more integrated and can provide personalized services based on customer needs, including autonomous driving, car sharing and connected cars. In the face of the upcoming industry transformation, blockchain will play an important supporting role. In the next two to three years, more companies will join to explore blockchain opportunities, prompting companies to develop more detailed strategies.

The motivation and value of investing in blockchain depends on the overall strategic goals, productivity and capabilities of the business. But if companies ignore the impact of blockchain, they may fall behind, and those more active companies will seize the opportunity to create value. This report analyzes the role and application of blockchain in the automotive industry, evaluates blockchain opportunities, helps companies understand blockchain, and then formulates the most effective response methods.

Core Ideas/Key Outcomes

1. Status quo of blockchain technology application cognition. Most of the interviewed car company executives' understanding of blockchain is limited to the general concept and the benefits it brings. As for which blockchain applications are closely related to car companies and have the greatest value, most executives still lack specific understanding .

2. Blockchain opportunities run through the entire value chain. Blockchain has a strong application base in the automotive industry, and blockchain opportunities exist across the entire industry, including OEMs, suppliers, dealers, financial institutions, and end users. Blockchain can improve the operating model of enterprises through a variety of applications, improve the efficiency of existing processes, help enterprises enter adjacent services and markets, and assist in the development of new transformation services. While blockchain can be used alone, it is expected to have a greater impact when combined with other technologies such as big data, the Internet of Things and artificial intelligence.

3. Practical applications of blockchain.

  • Validation and process improvements. Improve process efficiency across the supply chain and back office, including supplier know-how, part origin traceability and verification, connected supply chain and precision recall.
  • Vehicle management and incentives. Completing vehicle information and usage data across the industry includes dealer and customer incentives, expanded vehicle ledgers, odometer fraud, and ride-sharing and on-demand mobility services.
  • Finance, payments and insurance. Complete transaction processes and related information, including insurance contracts, car leasing and finance, connected services and electric vehicle payments.
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blockchain-in-the-automotive-industry

4. Four opportunities for applying blockchain technology.

  • Pilot: This type of application opportunity is less difficult to implement, has limited scope of application, and therefore lower direct value. Enterprises can use this as an entry point and further expand in the future to obtain greater value according to their own conditions.
  • Review: Comparable in complexity to pilot projects, but with higher short-term ROI and therefore more attractive value.
  • Wait and see: Lower value and more complex to implement than other opportunities. While it can bring value to the business and is expected to generate further benefits, it is fundamentally not worth the investment. Enterprises can pay close attention to their future development and consider combining with other blockchain application opportunities.
  • Transformation: These application opportunities are the most attractive in terms of value generated, but are also the most sensitive to external factors and the highest risk category. Such applications may require companies to work together to implement them.

Payment Scenario Development

On BTCC, workers are exploring how to use cars as a platform to undertake future payment scenarios. People can use cryptocurrency to pay for all car services directly on the car, which will greatly optimize the user experience of car payment. Although it is an exploration, more companies will enter this field in the future.

Present and Future

While the auto industry appears resilient and stable to the onlookers in other industries, the industry is fraught with challenges thanks to unicorns like Tesla, NIO, Rivian and Lordstown Motors. At present, car brands such as Tesla are valued at three times that of traditional OEMs such as Toyota, and sales are only one-twentieth of Toyota's. This fundamentally explains the root cause of valuation differences among industry occupiers, the technology maturity gap, which is also seen by industry proponents as an indicator of technological revolution. With the addition of electric vehicles and 5G in the future, blockchain will endow the automotive platform with stronger plasticity.

With the rapid development of blockchain technology, blockchain may provide solutions to many problems currently faced by the automotive industry within a year or two. We expect a turning point in the next five years when the automotive industry will embrace blockchain technology on a massive scale. To realize the potential benefits, companies should review their strategic goals and evaluate which blockchain capabilities are best for them to invest in, and how. In addition, companies should also consider whether they are ready to adopt blockchain, understand what technologies are required, and use blockchain to consolidate and expand on this basis. By ignoring the power of blockchain, businesses run the risk of being left behind and missing out on the potential opportunities blockchain provides for business growth.

© 2022 cryptoeric

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