Democratizing the Automobile Industry with Blockchain Technology: The New VeChain and BMW Partnership Explained
VeChainFraser last edited by
The automobile industry has been the victim of fraudulent practices for decades. Odometer fraud, falsified vehicle repair history, dealership fraud and other data manipulation is becoming more common with each passing year. To combat this, BMW and VeChain have been working together to develop an immutable blockchain vehicle passport system that works in unison with their new mobile application VerifyCar.
At this time, insurance providers, repair shops, banks and other constituents store data on their own databases meaning there is no single source of truth. By storing all the data on an immutable distributed ledger, each party is able to access transparent information about the vehicle instantly, making the entire process simpler and more efficient. VerifyCar connects BMW’s datasets directly to the VeChainThor Blockchain and documents the entire maintenance and repair history of the vehicle.
Additionally, the system keeps track of ownership transfer records, mileage, vehicle health and other data in real-time. It also utilizes Internet of Things technology and is combined with a unique VeChain ID that is given to each vehicle. The VerifyCar app has been extensively tested on internal vehicles but has not been installed in BMW’s current models as of yet. The news of this partnership between the two companies was announced during the recent VeChain Summit that was held in San Francisco on April 18th, 2019.
Cihan Albay, the IT leader at BMW Group’s Singapore Office explained the technology further at the summit and stated, “We built a digital ledger using the VeChain blockchain. Every interaction with a car has a stored hash key in the blockchain. That can be anything from changing a filter, changing the battery, having the annual service, etc. Our cars all have a SIM card which sends out datasets regularly. We store these datasets, verify them and of course make a call to the blockchain to prove that this call has already been made.”
Albay continues, “Blockchain is still a sensitive topic. People in Germany currently don’t know how to react about blockchain, especially when they hear that information stored on a blockchain cannot be deleted afterwards.” “We really need to have a look at our business strategy and how to roll out. But we have proven that it works, and we are keen to continue further.”
In Germany alone, approximately 33% of all vehicles are sold with a manipulated odometer reading. This misleads potential buyers into believing the vehicle they are purchasing has been driven much less that is actually has. This amounts to an average loss of about 3,000 Euros per vehicle or about 6 Billion Euros per year because the mileage on the odometer has a direct correlation to the value of the vehicle.
VeChain also collaborates with the German automaker as part of the BMW Startup Garage. The program helps integrate other enterprises into the multi-trillion-dollar automotive industry. Blockchain technology looks primed to integrate breakthrough solutions for BMW and the automotive industry as a whole moving forward. Let’s examine several of these solutions below.
Supply Chain Management with Manufacturing & Distribution Integration
The VeChainThor Blockchain is a perfect tool to help streamline the manufacturing and distribution process of the supply chain management system. BMW, like most automobile manufacturers, has production plants located on several continents across the globe. The supply chain must be able to pinpoint the shortest and most efficient shipping distribution routes to send vehicles and vehicle parts from one location to another.
These large distances come with immense challenges that make it essential to be able to link manufacturing plants and distribution channels together. Throughout this process, the blockchain tracks the location of vehicles and vehicle parts in real-time. This drastically increases efficiency and reduces costs, making the supply chain system faster and more reliable.
Vehicle Theft Mitigation and Vehicle Security Solutions
When a stolen automobile is connected to the blockchain it is very difficult to sell the vehicle because of the traceability features that the technology provides. Blockchain technology could one day make it impossible to steal a car even if thieves are using the most advanced practices available. By utilizing VerifyCar it will become nearly impossible for thieves to get away from law enforcement after a vehicle is stolen because the present location of the vehicle is tracked at all times.
These concepts are explained in more detail by a leading German blockchain company’s website below. “Blockchain technology could act as a major deterrent to car thieves by offering verifiable and unchangeable vehicle titles. Data regarding vehicles including ownership, insurance events, technical details, and more, could be written in to a Blockchain making the entire history of a vehicle traceable. This protects data important to the buyer and prevents thieves from being able to forge data belonging to the title.”
Vehicle Part Quality and Inspection Audits
Many believe that the automobile industry is simple and moves forward in a straight line, this is simply not the case. Imagine producing the same products everyday such as steering wheels, carpets, break pedals, engine parts, and computer chips while trying to organize everything in a productive manner. The utmost care, precision and attention to detail is also needed to maintain overall part quality to satisfy extensive auditing processes.
This is imperative to save money, time and labour to produce high quality machines as quickly and as structurally sound as possible. The industry is highly complex and the margin for error is extremely slim. BMW dealerships cannot afford to have customers waiting to purchase a vehicle if it arrives behind schedule. This means unsatisfied clients, which in turn results in less sales and affects the bottom line. As well, Automobile parts are counterfeited regularly. Counterfeit vehicle parts are not as well made and generally have a much shorter lifespan. If it seems to good to be true, it probably is. Blockchain technology could help mitigate these practices and one day make them a thing of the past.
Ride Sharing Applications and Self-Driving Cars
BMW has existing systems in place such as DriveNow, ParkNow and ChargeNow in order to make it easier for owners to charge, park and share their vehicles using a similar business model to Uber. Vechain’s blockchain technology could help enhance these technologies so it could soon be possible for a vehicle to drive, park and charge itself. Payments for specific tasks such as parking could also be enabled by using machine to machine communication, blockchain and Internet of Things technology in unison. VeChain’s blockchain technology could even be used to construct entire robot-controlled taxi fleets to pick customers in exact locations at a specific time. Autonomous driving is advancing so quickly that soon this technology could be much safer than human-driven vehicles. Blockchain will surely help make this vision a reality as society continues to move into the future.
VeChain and BMW are together transforming our world one automobile at a time through safety, reliability, innovation and transparency. By enabling new technologies that advance the automotive industry continuously, there is no telling how far we can go. VeChain is yet again utilizing VeChainThor’s Blockchain technology to help make our world a more just, secure and ethical place. In life, we must continue to progress in everything we do; progress makes us feel alive and without it we will never truly be free. VeChain’s innovation represents this to all of us. Are you ready for blockchain technology to forever change our relationship with the automobile?
I know I am.
If you would like to see the full version with all hyperlinks and a cover photo please follow these links below. I have opened all of my articles up for the public to see. Thank You - Lars Fraser, Vancouver Island, Canada