blockchain and automotive examples of applications

Blockchain is the world’s leading software technology for many industries, and it has the potential to transform and change the way we do many things. Although Blockchain is still in its early stages, one industry that is eager to capitalize on it is the automobile industry.

Blockchain is a term commonly associated with cryptocurrencies and NFT (non-fungible tokens), but it is also increasingly being used in industries other than finance.

The day-to-day operations of organizations involved in manufacturing automobiles or automobile components, particularly within the supply chain, consume significant resources and necessitate exchanging a large amount of data.

Blockchain-based solutions are ideal for dealing with large volumes of data correctly and efficiently, facilitating data verification.

The Blockchain is a cutting-edge and revolutionary technology that is increasingly being used within businesses to successfully control the supply chain, improve manufacturing verification, optimize logistics, and facilitate the implementation of new manufacturing processes.

But how will Blockchain help improve the automobile industry? This article will discuss how Blockchain is used in the automobile industry and five examples of applications of Blockchain in the automobile industry.

But before we talk about Blockchain and automobiles, let’s briefly discuss what Blockchain is and how it works.

What is Blockchain

Blockchain is a virtual ledger that records public and private transactions and allows peer-to-peer (p2p) transactions to take place without needing a third-party intermediary.

It is a distributed environment of information in which all saved data is grouped into blocks that are intertwined with each other and encrypted to protect security and privacy.

In practice, this allows for data management in a distributed, decentralized, and synchronized registry across a wide range of devices. The data is saved and transmitted in an extremely stable manner, providing a public data structure with undeniable facts.

How Does Blockchain Work?

Blockchain networks were designed with distributed processing in mind. Unlike traditional solutions, data is not saved on a single server, but rather many devices save parallel data using cryptographic functions.

Historical records saved in a Blockchain or Blockchain system are no longer subject to change. The processing of information through this type of network ensures the value of intellectual assets and the ability to keep a correct and transparent record of transactions.

The fact that the records entered in blocks have a fixed value after they are made public is a key component of the Blockchain. Furthermore, the Blockchain allows for the most efficient sharing of information with authorized parties.

For many of these reasons, the Blockchain is a very powerful option, particularly in a context where many corporations involved in commercial manufacturing are developing their solutions.

How Blockchain is Used in the Automotive industry?

The supply chain is one area where Blockchain can benefit the automotive industry, with the production of automobiles and their plethora of components, which is ideal for implementing this technology.

Automobile and original parts makers can maintain a consistent relationship with their suppliers; however, what happens to the rest of the process? What happens to the pieces that move from one location to another?

Until now, automobile producers and original parts producers (OEMs) have expected that their supply chain is trustworthy until there is any obvious physical tampering or that the shipping logistics of said parts fail (theft, delays, etc.).

However, with the arrival on the scene of a brand new actor within the automotive sector, which includes the identity, the confidence alarms have gone off, and risks are lurking.

What would happen if the components/parts were counterfeited or no longer worked like the original parts for that autonomous vehicle, clearly causing breakdowns or road accidents? Automotive and OEM producers should take a leap of faith and rely on Blockchain for a trust-building system.

Without going any further, product ID technology in the Blockchain would serve to maintain authenticity at some point in the delivery chain. This could work because for each component or action performed on the vehicle, a unique identifier or identifier may be created and entered into the secure distributed database accessible to OEMs and their supply chain partners.

Everyone will understand which pieces were created, how many there were, who created them, and other important information.

This creates a check and balance system for the entire supply chain ecosystem, with cloud servers validating and recording everything.

How Will Blockchain Be Implemented In The Automotive Industry?

Insurance companies, parts manufacturers, repair shops, and suppliers can exchange information in real time via a secure network thanks to Blockchain technology. In practice, the applications are numerous and diverse, with many more to be discovered.

But the following are ways in which Blockchain will be implemented in the automobile industry:

  • Avoid instances of fraud: Blockchain technology may even enable comprehensive control of all components that comprise a vehicle, preventing manipulation or fraud.
  • Logistics and industrial traceability: The manufacturing of a vehicle is particularly decentralized due to the involvement of numerous component manufacturing companies. In the current situation, with a plethora of different databases, Blockchain technology will make it possible to increase the performance of processes by registering the supplier of each piece, in addition to its origin and quality.
  • Vehicle fingerprinting: The vehicle market will benefit from increased transparency because the car’s virtual identification can be immutably recorded within the chain of blocks or Blockchain, with information such as the rate of circulation, the number of visits to the workshop, the components that have been changed, and so on.
  • A continuous link between producers and vehicles: Manufacturers may be able to detect feasible improvements, accelerate innovation techniques, and precisely control motor protection. Companies may be capable of anticipating the failure of various components of a vehicle to provide the customer with a better driving experience.
  • Certified high-end vehicles: The Blockchain enables the authentication of new vehicles and their components. Lamborghini was among the first to take the step of certifying an Aventador S using Blockchain technology. This new feature has digitized and greatly simplified the authentication procedure. Typically, when this type of high-end vehicle is resold, it must pass hundreds to thousands of certification inspections at the brand’s headquarters. Because of the Blockchain and its automatic validation protocol, the various stakeholders (technicians, dealers, etc.) no longer have to bother their superiors every time.
  • Identify the source of components: In general, the Blockchain makes it possible to ensure component traceability. Volkswagen and Volvo Cars are already using it to track cobalt, which is used in electric vehicle batteries and to ensure that the supply of their raw materials is the only one announced. However, Mercedes-Benz has expressed a strong interest in this technology, citing the importance of environmental compliance in its supply chain.
Blockchain and automotive: car coming out of a very large lock. There are three other padlocks on the ground.
Credits: Freepik
  • Delivery: Customers are more satisfied when their vehicle is shipped using Blockchain. The block technology system is always aware of the location of the car, potential incidents, and the shipping date. As a sales service, the supplier can display the information on its website. The logistics chain can be improved using Blockchain technology right now. There is no need for regulatory changes to put it into practice, as is the case with other types of solutions.
  • Lessen Paperwork: The use of Blockchain technology within automobile manufacturers’ supply and delivery chains has ensured the removal of paperwork that occurs in both. It will improve the method’s performance because the manual tasks of all the paperwork, which no longer add value, will be eliminated. All paper and Excel files are eliminated by Blockchain. The savings could range from 10% to 20%, depending on how close the supply parts producers are and when the vehicle is delivered. The paperwork savings margin will grow in international transport with the wide range of transport and borders it includes. There are papers that delay the process because they must be delivered by hand; their delay even forces the product to be discarded. Paperwork is automated using Blockchain Smart Contracts (conditional order programs), and each file’s hash (time-stamped digital signature) ensures its authenticity.

Blockchain and Automotive: 5 Examples of Real Applications


XCEED (prolonged compliance end-to-end distributed) is a brand new Blockchain solution developed in collaboration with a number of the primary European vehicle manufacturers and issuers, including Knauf Industries Faurecia, Renault Group, Simoldes, and Coşkunöz.

The XCEED system, which was tested on a large scale on September 10, 2020, proved beneficial and efficient, with the potential to significantly improve and optimize the automobile industry’s logistics chain. This has caused various entities that were previously a part of the XCEED project to grow and enforce comparable solutions.

The primary function of XCEED is to assist the European automobile industry in certifying car components, ensuring that they meet the essential first-class requirements and covering all stages of the process: from design to production.

XCEED allows thousands of components assembled on a vehicle to be tracked and verified for compliance in near real-time. XCEED is now available to global suppliers and OEMs throughout the supply chain.


The Blockchain also allows for this through smart wallets, which have been tested and embedded on board vehicles by Jaguar and IOTA. This innovation, far from being a gimmick, responds to various pitfalls within a motorist’s user journey.

Instead of owning a plethora of charging operator subscription cards, a decentralized charging network, which is entirely based on smart contracts with suppliers, would allow the user to connect his vehicle to any terminal. The Blockchain could then handle all operations, from the car’s identity to the financial transaction.

And, like other wallets, smart wallets can help you obtain, keep, and spend money—specifically, cryptocurrency. As a result, a linked car can obtain crypto from navigation service providers or road infrastructure authorities and actors in exchange for the information it will share about the state of the road or traffic density. This currency can recharge batteries, pay a toll, or park.


Mobi, which stands for Mobility Open Blockchain Initiative, is an international non-profit intelligent mobility consortium that includes a large number of industry players. It was created to discover opportunities with the help of Blockchain.

This organization’s goal is to make transportation more well-organized, equitable, decentralized, and sustainable and provide access to a “new economic system of movement,” connected automobiles, and IoT commerce.


Daimler, one of the most well-known car multinationals producing luxurious vehicles within the vehicle industry, including Mercedes-Benz, is now collaborating with Circulor.

They are working on a Blockchain initiative to track CO2 emissions from their Cobalt delivery chain process.

Its fundamental goal is transparency and viable Blockchain solutions to reduce CO2 emissions. Furthermore, Daimler and Circulor must track any secondary material, which may include their Cobalt mining.


 ARXUM provides blockchain-based solutions for the automobile parts supply chain, allowing customers to trace individual data back to manufacturers.

Blockchain and Automotive: The benefits

• A possible manufacturing chain for developing self-driving cars. Blockchain technology will make it easier to combine all data about the status and actions of vehicles in real-time.

• Maintain part traceability. You can also manage the origin of the car’s components and the entire journey they took to reach the factory.

• Reduce costs along the logistics chain. The number of intermediaries in transportation could also be reduced with the help of Blockchain.


In short, the Blockchain has a say wherever transactions occur. It appears to be a technology that will undoubtedly grow to be critical in the years to come, not only for the automotive sector but also for all industrial sectors.

Currently, we’ve only seen a  little drop in the ocean in terms of Blockchain technology. Nonetheless, we’ve seen remarkable applications of Blockchain technology in the automotive industry. This results in a safer and easier future for the end user within the automotive market.

With projects like MOBI, an increasing number of producers will join the Blockchain revolution and use this advanced technology to streamline their data. While there may be doubts in the future, Blockchain guarantees a tamper-free and transparent data-sharing process that will be of the most value to automakers in the near future.

So, while the possibilities appear limitless, car technology is still in its infancy. Automotive giants are confident that Blockchain will quickly play a pivotal role in their industry.

See you soon,

Scaling Parrots

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