Since the mid-2010s the automotive industry has been on somewhat of a tech journey, researching into the potential of blockchain technology to tackle mobility challenges. We have seen some great proofs of concept yet, in reality, many blockchain pilots hit the brakes before reaching the market. But wait, fasten your seatbelts! Thanks to new battery rules and a mountain of EU blockchain investments, we are beginning to step up for some commercial opportunities. As automakers gear towards safety and the all-electric era to meet EU rules, blockchain technology is shaping up as the undercover superhero for sustainability in the automotive world. But, back in the early days, blockchain pilots were not unlike those promising movie trailers - tackling issues such as mileage fraud prevention, usage-based insurance and identity verification. Although these initiatives demonstrated promising proofs of concept, none successfully made it to the market whereby raising questions about the challenges and lessons learned. The EU is now funding mass commercial blockchain pilots, offering a chance to connect industry players for real-world applications - especially as vehicles become more autonomous.

Remember those blockchain flings in the mid-2010s? Jaguar with IOTA for smart wallets, BMW fighting odometer fraud with VEChain and Daimler Mobility's crypto coin for eco-friendly driving rewards? Good times… However, many promising ideas remained in a pilot phase due to challenges in aligning technology cycles between start-ups and slow-moving automotive corporations. Start-ups struggled to demonstrate tangible value to automakers, hindering the evolution of blockchain pilots into market-ready products. Yet, despite this, we have seen some successful blockchain adoption stories (such as Xeal's distributed ledger technology for EV charging payments) emphasise solving real problems rather than being overly focused on the technology itself. The EU's upcoming battery regulations, with mandatory battery passports, undoubtedly present an opportunity for blockchain technology. Battery passports, acting as digital twins, can track the lifecycle, provenance and environmental impact of batteries, thus creating a sustainable supply chain. Correspondingly, blockchain-powered platforms have already proven effective in traceability - such as Bridge of Weir using it for material tracing in leather production for car interiors. Furthermore, the technology supports provenance, tracking and authenticity in the automotive parts industry. EU-funded projects such as GAIA-X and the Catena-X consortium focus on standards for secure data exchange in the mobility sector, solving real problems such as circularity and digital twins in automotive supply chains. These projects indicate a broader societal and governmental push towards decentralization in response to concerns about centralized hyper-scaling and data security.

Now, prepare yourselves for a tech-heavy duet - Panasonic and Sila. Sila's Titan Silicon anode powder, replacing graphite in traditional lithium-ion batteries, offers a potential 500-mile range and ten-minute recharge times. Sila, co-founded by a previous Tesla team member, finalized a supply pact with Mercedes-Benz concerning its extended-range G-class electric SUV. In essence, silicon stores up to ten times more energy than graphite, enhancing battery energy density and the EU Carbon Footprint Regulations mandate that, from 2027, EV batteries carry a label declaring their carbon footprint. These “battery passports” digitally track batteries and materials through the supply chain, so promoting transparency. In the UK, Minima has been working with a number of vehicle manufacturers and EV charging firms on its blockchain-powered platform - in some cases also using Internet of Things (IoT). Examples include:\

· EV charging (July 2023)

Minima enables the generation and transfer of tokens over a peer-to-peer network, allowing secure access to public and private charging points. This not only provides car users with a choice of energy providers but also allows private charge point owners to earn income, so easing congestion in the charging infrastructure.

· motorsports (July 2023)

Minima plays a pivotal role in certifying and validating data from sensors in motorsports. This leads to the creation of digital records and unalterable data origins, offering added value to racing teams and enthusiasts. The secure and speedy transfer of information from cars enhances communication and augments safety.

· V2V communication

Minima fosters secure peer-to-peer communication between vehicles, enabling the direct exchange of real-time information without intermediaries.

· roadside communication

The platform enables secure peer-to-peer communication between vehicles and roadside infrastructure, playing a role in advancing road safety and efficiency.

· digital service book

Minima enables data exchange related to usage-based insurance and streamlined litigation settlement, providing a digital service book for vehicles.

· automated payments

The platform enables the automation of payments directly from the car's wallet to charging stations, simplifying the transaction process.

· NFTs for secure vehicle access

Minima explores the application of NFTs to securely store biometric data on mobile devices, offering a solution for physical access control to the vehicle.

The capabilities of Minima go beyond these specific applications, highlighting its capacity to revolutionize multiple facets of the automotive industry by facilitating secure, decentralized communication and transactions between vehicles and infrastructure. Blockchain adoption is rapidly growing in the automotive sector to also address concerns from environmental, economic and social perspectives. The priority is on deploying blockchain applications for the general public, commencing with uncomplicated, high-impact use cases and progressively broadening services. The use cases of blockchains in the automotive industry are rapidly growing, taking into account environmental, economic and social considerations. The focus is on leveraging blockchain applications for the wider public, starting with uncomplicated, high-value applications and gradually broadening the services. Meanwhile, integration with telematics, IoT and AI is crucial for the success of blockchain solutions in the automotive sector; telematics, including V2V and V2X communications, relies on secure and unaltered data, thus making blockchains vital. The growth of smart sensors, IoT and the need for data security, all align with blockchain's capabilities. However, combining blockchains with connected and autonomous vehicles introduces legal challenges, and assigning data processing roles to stakeholders and ensuring compliance with GDPR principles pose difficulties. Additionally, compatibility with the current European legal framework is uncertain, necessitating further research, official guidance and collaboration between government agencies, industry representatives and technical experts.

Connected and Autonomous Vehicles (CAVs) standards are not globally being adopted but in Europe it is becoming clearer, in an effort to Its report to bolster and safeguard all parties involved, necessitating collaboration to ensure guidelines align with the objectives of a competitive market. The European Data Protection Board (EDPB) guidelines on blockchain are seen as fundamental for the EU to adopt Emerging Digital Technologies (EDTs), such as blockchain and connected vehicles, on a large scale, providing legal certainty and supporting Europe's competitiveness in the market. Blockchain is akin to the backstage manager, transforming the auto industry by boosting transparency, security and efficiency in various processes. Key applications include secure and reliable vehicle history tracking, improved customer relationship management (CRM), supply chain management and tracking, smart contracts for vehicle financing and leasing, and efficient vehicle lifecycle management.

Benefits

· secure vehicle history tracking - blockchain's immutable nature ensures accurate and untampered vehicle history and maintenance data, fostering trust between buyers and sellers.

· enhanced CRM - blockchain streamlines CRM by securely storing customer data, contracts and transaction details, so allowing dealerships to provide personalized services.

· supply chain management - transparent supply chains utilizing blockchain technology enable the tracking of production, shipping and distribution, so fostering enhanced efficiency and decreased costs.

· smart contracts - automation in vehicle financing and leasing through smart contracts ensures a seamless experience for both buyers and sellers with automated payments and contract enforcement.

· enhanced lifecycle supervision - employing blockchain allows for effective tracking of a vehicle's lifecycle, aiding in decision-making concerning maintenance, trade-ins and resale values.

Challenges

· regulatory climate - the fluid legal framework surrounding blockchain presents challenges, demanding businesses to navigate through uncertain landscapes.

· scalability - as more businesses adopt blockchain, scalability becomes crucial to handle higher transaction volumes effectively.

· collaborative efforts - the attainment of success is contingent on stakeholders, including manufacturers, suppliers and dealerships, to collaborate effectively.

Globally, we are on the fast track to having over 400 million connected vehicles by 2025. A future where vehicles collect vast quantities of data to boost safety, fuel efficiency and navigation is almost upon us. And although there are still a number of challenges in the current way in which vehicles ‘talk’ to each other -such as security gaps, privacy worries and reliability - blockchain technology (known for its decentralized, transparent and secure nature) offers potential solutions for data collection, storage and access for the automotive sector. Prominent car manufacturers incorporating blockchain technology include: BMW, in supply chain management to track part origins and streamline logistics; Daimler, storing vehicle history data and enhancing mobility services; Ford, for payment transactions between cars and other smart devices and tracking; and Volvo, Tesla and Ford all using blockchain technology to track the provenance of cobalt used in EV batteries.

The automotive industry's engagement with blockchain technology is certainly at a pivotal juncture, overcoming past hurdles with promising strides and recent collaborations, such as that of Panasonic and Sila's advancements in electric vehicle battery technology exemplifying a notable shift toward higher sustainability. Minima's specialized blockchain for automotive applications further underscores the potential for decentralized solutions in areas such as EV charging and motorsports and blockchain's applications, from secure vehicle history tracking to smart contracts, offer significant benefits despite lingering challenges. And, as the industry races towards widespread vehicle connectivity, the question arises: can blockchain truly revolutionize automotive industry overcoming obstacles and shaping a more transparent, efficient future?

This article first appeared in Digital Bytes (9th of January, 2024), a weekly newsletter by Jonny Fry of Team Blockchain.