Blockchain Applications in the Automotive Sector

Read and download our report on Blockchain applications in the Automotive Sector here!

The automotive industry is looking for new tools in existing business processes to gain a competitive edge. One such promising technology that could advance the automotive industry is blockchain.

Several use cases for blockchain in the automotive industry have been proposed and are currently in various stages of testing or real-world implementation. Blockchain uses in the automotive industry include parts authentication, marketing interactions, financial applications, connected car and vehicle tracking, autonomous driving, car sharing, marketing, CO2 emission tracking, and many others. While the aforementioned applications of blockchain technology certainly make a strong case for changing many facets of the automotive industry, the community is just starting to explore the surface of blockchain applications in the automotive sector within the urban and smart city domain. In this report, we mainly focused on upcoming trends of urban application blockchain in the automotive sector, what benefits it can bring in general, and what bottlenecks exist for its successful implementation from the regulatory standpoint.

One of the fundamental issues discovered during report preparation is that the ecosystem of the use cases within the automotive sector, where blockchain could support the development and solve some of the existing concerns, is rapidly growing. However, it is crucial to consider the applications from multiple perspectives (e.g., environmental, economic, social, etc.), focusing on better leveraging these applications to the general public, introducing simple use cases serving high value and gradually expanding the link between services. Another aspect to be considered when developing blockchain solutions in the automotive sector is synergies with other concepts and technologies. For example, telematics provides a combination of vehicle data generated by the vehicle and received from other vehicles and infrastructure. In the connected automotive space, telematics includes navigation based on software, V2V (vehicle-to-vehicle) and V2X (vehicle-to everything) communications and a large number of services that can impact vehicle and driver and passenger safety.

To fulfil an essential level of safety and security, data sent and received by telematics systems must be kept secure and unaltered, and blockchain is vital for just such applications. Moreover, the IoT concept and applications have become a part of the environment we are surrounded by and operate within, and the automotive sector is no exception. Smart sensors are increasingly being used to monitor traffic and communicate with it (V2X), and the need for data speed and security has become apparent. Finally, comprehensive analyses and predictions based on the data powered by AI would be critical for advancing services and supporting new needs as the data will grow along with insights and new use cases. This report has dealt with the opportunities and legal challenges created by blockchain and connected and autonomous vehicles as prime examples of EDTs.

Fundamental questions of compliance raised by CAVs and blockchain, when individually considered, can be observed, and these are only exacerbated when applying the latter to the former. Legal challenges inherent to both EDTs, such as difficulties in assigning data processing roles to stakeholders and ensuring compliance with GDPR principles (e.g., accountability, transparency, data minimisation, storage limitation) arose, as well as others specific to each one separately.

Adding to these challenges – while the legal and regulatory framework for CAVs is clear – there are still many open questions about the compatibility of blockchain with the current European legal framework. Moreover, regulations and frameworks need to be developed with the input of government agencies, industry representatives, and technical experts to ensure the guidelines support and protect all parties involved as active and passive users.

Further research and official guidance are very much needed for legal certainty to be obtained regarding how blockchain can be implemented in the context of the IoV. To this end, the upcoming EDPB guidelines on blockchain (EDPB, 2021) a will prove fundamental for the EU to adopt such EDTs on a mass scale and for Europe to reach its objective as a competitive market player.

The report is available for download here