Blockchain’s role in the development of the electric car industry
By Mitull Batraa
Due to its immutable tracking, sharing and securing capabilities, blockchain technology can benefit the emerging EV sector by creating a win-win situation for all stakeholders. Electric vehicles (EVs) are believed to be the future of the automotive industry, but their full potential has yet to be realized. While experts suggest different methods to make EVs a mainstay in both public and private transportation, everyone agrees that the use of blockchain technology can bring about a transformative change in the EV segment. Also known as an open ledger solution, blockchain is equipped with a number of features that can be used to increase the appeal of electric cars among the masses. There are a number of areas where the use of blockchain can help, although the following are key operational fields where the technology can bring a transformative change to the EV industry:
1) Tracking of suppliers: The electric car industry is in the initial phase of creating, maintaining and controlling the value chain. This happens through the creation of links between suppliers, manufacturers and other stakeholders in the value chain, and this is precisely where the relevance of blockchain networks comes to the fore. The ability of blockchains to track and trace the origin of supplies, components and other raw materials can be leveraged by the EV industry to establish a dynamic and vibrant value chain. For example, electric car manufacturers can use blockchain to track the supply of precious metals such as lithium, cobalt, wolframite, etc., which are sourced from third world countries. This traceability not only helps streamline purchasing operations, but also prevents unauthorized tampering that could affect the quality of the finished product.
2) Streamlining production: Blockchain-based supplies are likely to have a negative effect on the production of electric cars. By decentralizing information, open ledgers help manufacturing managers effectively plan, schedule, run and control plant operations. These networks can predict supply disruptions, inventory shortages and transportation delays well in advance, helping manufacturers with contingency planning to ensure a smooth and uninterrupted flow of supplies to market. Furthermore, the decentralized capabilities of blockchain also allow EV manufacturers to inspect quality, plan inventory operations, schedule shipping to partners, and streamline final delivery to customers. Moreover, the fact that all entries on the blockchain are immutable and no party can change or manipulate the records, takes the utility of blockchain for the electric car industry to a whole other level.
3) Manage recalls: Electric vehicles are at an early stage of development, and it is not unusual to see many companies recalling vehicles to correct inadvertent defects. However, the recall is not easy and involves a lot of effort to identify defective vehicles, communicate with customers, coordinate with dealers and carry out remedial procedures. Blockchain can come in handy here and by accurately identifying the defective components sourced from specific suppliers, the technology can convert the otherwise highly complex process into a simplified procedure. Not to mention that EV manufacturers can bring home significant cost savings by using blockchain platforms for recall operations.
4) Power sharing: One of the biggest stumbling blocks in the widespread option for electric cars is the rarity of charging points. However, blockchain can offer a solution to this problem through its revolutionary peer-to-peer (P2P) charger sharing concept. This concept allows users to share their chargers/charging ports with others when they are idle and not in use. The payment for the power supply facility is done digitally and a few such projects already operational globally are already proving to be quite successful in dealing with the lack of charging infrastructure. As always, both power sharing and monetary transactions processed on blockchain platforms offer unmatched security, safety and immutability properties to users.
5) Digital records: Digital records on Blockchain network can offer complete information about electric cars to potential buyers. Especially when it comes to buying used EVs, these immutable records can prove instrumental in providing authentic information regarding vehicles’ accident history, service records, exterior/interior condition and battery status among others. This will remove the hassle of having vehicles verified by a third party and offer a true and unchanging overview to potential buyers.
Contrary to the popular belief that blockchain is primarily used in the fintech sector, the technology has multiple use cases that span across business verticals. Especially when it comes to electric vehicles, the use of an open ledger can help industry stakeholders create, communicate and deliver superior value propositions to the target market. Blockchain can help EV companies source raw materials, streamline production and fix segmented supply chains. Furthermore, the technology can also help manufacturers to recall vehicles, share charging infrastructure and deliver better value to potential buyers. In sum, blockchain has the ability to completely transform electric cars, and it is only a matter of time before the use of the blockchain becomes commonplace in the electric car industry.
The author is the co-founder, Udaan E Vehicles
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