Blockchain in Automotive Supply Chain: Wide Use Cases

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Written by
Shivani Tripathi
Published on
October 14, 2022

In modern times, blockchain technology has come a long way compared to where it stood a decade ago. Blockchain refers to a structure of broadcasted ledger technology that maintains records of online data or ‘exchanges’ in a manner that makes them exceptionally secure. 

In addition, when a transaction takes place, it is broadcast to a peer-to-peer web network containing numerous interconnected networks that validate the trade for consistency. It might not be wrong to say that, primarily presented as the backbone of modern electronic cash systems, blockchain has evolved exponentially with the power to disrupt business industries. 

Given its enhanced security and cutting-edge technology, blockchain is prevalent in every business domain. It is no different for the automotive industry, which is one of the sectors that could profit the most from the blockchain revolution. Keep reading to learn more about the use cases of blockchain in the automotive industry. 

Current Challenges in the Automotive Industry: Resolutions Provided by Blockchain 

The automotive domain is rapidly embracing new technologies that are green, energy-efficient, and smart. However, with innovative trends come unknown challenges, and companies in the auto industry face numerous hindrances with their business functions. 

To overcome these challenges, automotive giants are now closely monitoring the blossoming of blockchain to leverage its possibility and improve their business processes. Here are some prevalent challenges in the automotive industry and how blockchain can help overcome them:

Counterfeit Spare Parts 

Auto manufacturers have been encountering the danger of counterfeits for years, and there’s no practical system to prevent it. The absence of a solution to follow spare parts in the supply chain is inviting counterfeit parts manufacturers to penetrate the market. 

Nevertheless, by implementing a blockchain-based solution, you can guarantee that all participants employ an identical supply chain, reducing the risk of fake parts.

In addition, by integrating automotive supply chains into a blockchain-based network, manufacturers can acquire insight into the inefficiencies in their supply chains and rectify them timely.  

Vehicle History Administration

While there were no effective methods to track down and identify cars once they left dealerships earlier, this problem was resolved with the advent of blockchain technology. 

Blockchain technology helps store different automobile data, including significant restorations, inspections, casualty damages, mileage, license details, and comprehensive car history from the dealership.

Furthermore, used car customers can confirm these attributes to guarantee that the automobile they are spending for is lawful and carries a perfect upkeep record. 

Insurance Scams

Insurance scams are pretty common in the automobile domain. Individuals present fraudulent insurance claims or numerous claims that usually go undetected and cost significant amounts of money to vehicle insurers. 

However, with the help of a blockchain network, automobile manufacturers and insurers can better track user behavior and analyze the data.

Furthermore, blockchain can also assist insurance companies in determining insurance premiums based on claims records. It can further streamline lengthy and time-taking paperwork and negotiation of insurance arrangements. 

Blockchain Use Cases in the Automotive Industry

While the automotive industry acknowledges the possible effect of blockchain technology, it is still in the initial phases of blockchain adoption. Here are some prominent use cases of blockchain in the automotive industry:

  • Finance and Auto Leasing 

A blockchain network that streamlines vehicle tracking would work wonders for automobile deals. In addition, a dealer control system built on blockchain will leverage safe communication and reduce data risks in the leasing domain. The medium would enter the functional entities when leasing a car to a customer safely. 

Moreover, from conducting KYC client assessments before leasing the vehicle and leasing the contract repository on the blockchain to computerized payment after the vehicle comes back, the platform would readily manage all procedures.

  • Carsharing and Ridesharing

The need for ridesharing and carsharing assistance is expanding as possessing a car becomes more costly. However, what makes these services stand out is blockchain's power for process automation and scam deterrence.

In addition, the risk of fraud is one of the most significant challenges for providers and recipients of mobility assistance. However, with the help of smart contracts, a blockchain can assist these two parties in making crucial financial arrangements with validation after all contract conditions are met.

  • Advanced Technological Integration 

Besides smart contracts, you can also try integrating blockchain with other technologies. For instance, you can combine blockchain technology with the Internet of Things (IoT) technologies to enable quick service deliveries for passengers and drivers.

Further, it might not be wrong to say that this technological integration provides numerous compelling possible use cases, varying from blockchain-based payments between autonomous vehicles to spending on toll charges and food delivery.


In a nutshell, the automotive industry has always stood at the forefront of technological invention, with automakers continuously exploring innovative ways to use cutting-edge technologies at their disposal.

Looking at the potential use cases of blockchain in the automotive industry, it is clear that it can bring significant benefits by improving supply chain processes and streamlining production. 

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