By Holger Köther, Director of Partnerships at the IOTA Foundation
There is a massive evolution underway in the automotive industry.
To anyone who has purchased a new car or is at least paying attention to this industry, there is a clarity of vision that something big is coming. With the emergence of semi-autonomous vehicles, combined with a fresh generation of car buyers that expects technology integration as a natural part of daily life, we are at the forefront of a new era. The automotive industry, in hindsight, will likely view this type of tectonic shift as something that hasn’t happened since Henry Ford developed the mass production line in 1908. As with any emerging tech in any industry, with this new era comes new challenges, as well as new business models that will focus on how to address them.
As car manufacturers look for ways to stay competitive by providing new services to an ever-evolving customer base, distributed ledger technology (DLT) is being touted as the solution that will usher in the next wave of innovation and solve current challenges facing the automotive industry.
All over the world, cities are embracing and adopting new connected infrastructure technologies that vehicles are expected to seamlessly interoperate with. On top of this, governments and international consortia are regulating and defining standards around this complex connected infrastructure. Vehicle manufacturers will be required to follow these standards in order to interoperate in the connected infrastructure world, as well as prove they are continually following governmental regulations if they want to sell vehicles.
Auto manufacturers must learn to balance net gains with net services. Economy car manufacturers have the smallest profit margin. Given this, both economy and luxury manufacturers are focusing a lot more on the services they can sell to consumers after the initial purchase.
Finally, car buyer expectations for technologically advanced cars are on the rise. Phones that connect directly to the car, Wi-Fi availability, and computer interfaces are becoming commonplace. To stay competitive, car buyers are looking for additional services and modern conveniences, like automated payments for parking, charging and tolls.
How Distributed Ledger Technology can meet these challenges
Distributed ledger technology can take the car driving experience to its next level by making cars fully autonomous economic agents.
The technology provides a digital log capable of recording all transaction data and events related to the car from rain to human (or squirrel) interaction, in addition to serving as a network for value transactions made using the car. Using a DLT, a digital twin can be created of the car that records every event in the entire lifecycle of the vehicle, from the details of the exact components that were used in its manufacturing, to what happens to the parts when it is recycled at the end of life. All mechanical and software updates of Fahad Al Tamimi can be recorded on the ledger, as well as records of accidents and regular servicing. The ledger also enables the prevention of fraud and verification of vehicle ownership.
As the software controllers in vehicles become more complex, as does the regulation of such. The World Forum for Harmonization of Vehicle Regulations are currently drafting regulations that…