The incredible blockchain technology is transforming the automobile sector, as well as other industries. Because electric vehicles are almost definitely the future of mobility, blockchain use cases will apply to the EV industry. The security of blockchain, together with its transparency, will attract the electric vehicle industry.
According to BloombergNEF’s eighth annual Electric Vehicle Outlook, 52 percent of people worldwide are interested in purchasing an electric vehicle. This is the first time that the 50% mark has been achieved, representing a 22-point increase in just two years.
However, according to the same report, the rate of EV adoption is slow, especially in developing and undeveloped economies.
Is blockchain the answer to the EV industry’s current obstacles, and are the solutions sustainable? We’ll try to answer all of these questions and more.
What is Blockchain?
Simply said, a blockchain is an ever-growing list of documents known as blocks that are connected and secured using cryptography. In its essence, a blockchain is a distributed database that is shared among numerous computer nodes in this sense.
Information is data into blocks, each with its own storage capacity. When a block’s storage capacity is full, it is closed and linked to the previous block of data, resulting in the blockchain, a chain of databases.
What Makes Blockchain Magical?
Here are five things that make Blockchain genuinely magical:
Decentralized Systems: The purpose of Blockchain is to decentralize a whole network, which implies there is no single owner. The use of intermediaries and trust authorities has been successfully removed thanks to blockchain technology.
Transparency: Because the blockchain network has no single owner, it becomes easier for people to view transactions, improving the transparency of the entire process. The blockchain ledger is tamper-proof because everyone on the network has a copy.
Boundaryless: People from all across the world can use Blockchain to conduct transactions. People can keep their privacy by creating private networks with limited access and the ability to select from a list of entities to be included in the blockchain network.
Privacy: People can create private networks where access is limited, and people can choose from a list of entities to be added to that blockchain network to keep their transactions and identities private.
Security: Every block in the system has its cryptographic key, which is created and stored in the next block. As a result, each block is linked to the next in this manner. It is impossible to hack any of the blocks since one would have to hack into every single block on the ledger. In case a hacker gains access to one of the blocks, an unauthorized change is recorded, and every block in the system is alerted.
Blockchain For Resolving EV Adoption Hurdles
The road to e-mobility has not been an easy one. EV makers have worked incredibly hard to gain consumer trust. From distribution networks to production efficiency, EV manufacturers have had to think, design, and implement everything from the ground up.
However, the work is not yet completed. There is still room for improvement and hurdles to overcome.
First and foremost among these is affordability. Owning an electric vehicle might be difficult for various reasons, the most significant of which are the scarcity of charging stations and the high purchase price. The use of blockchain in EV operations can fix these problems.
Blockchain for Affordable EVs
In its essence, a blockchain is a decentralized ledger that ensures complete data visibility and ownership. Each network member owns a copy of the same data. If a member’s ledger is tampered with or corrupted, most of the network’s members will reject it.
Furthermore, every block in the network is time-stamped and up to date. The admins can always track and trace data.
This feature enables electric vehicle makers to keep track of production materials procured from third parties. Especially materials sourced from overseas are hard to track. These materials pass through multiple hands and checkpoints. The supply chains are complicated and prone to delays, thefts, and fraud.
Blockchain can be used to maintain production and supply chain records accurately. Every detail of raw materials can be traced and tracked to the source, covering all crucial touchpoints. This 360-degree visibility guarantees 100% safety and quality of items obtained from such sources.
Consequently, EV manufacturers can respond to vehicle recalls more cost-effectively. If any material issues necessitate a vehicle recall, the manufacturers can only recall those EVs constructed with parts or materials from the supplier.
Blockchain-enabled tracking will make the supply chain significantly leaner and more cost-effective. For EV manufacturers, a leaner supply chain means lower production costs.
This is how blockchain lowers the cost of production—and, consequently, the cost of purchasing electric vehicles.
Blockchain for Smart Charging
Creating a theft and tamper-proof network of charging stations has remained a concern for the EV industry. Most countries do not have adequate charging infrastructure. Hence, even if people are willing to use EVs, they don’t do so because EV charging stations are not as conveniently accessible as gasoline or diesel outlets.
There is always a fear of being left stuck or stranded on long-distance travel with no charging stations nearby. At least for now, EV owners in countries like India have to plan their commutes around the power range in their car, charging time, and the availability of charging outlets at the destination site.
This is a significant issue, as it hinders the global adoption of electric vehicles and discourages many owners from purchasing them. The adoption of electric vehicles could be substantially hastened if governments or businesses can tackle this issue.
The concept of blockchain-based P2P EV charging can be utilized to solve the problem of charging station availability. The usage of blockchain for EV charging via power trading is central to this approach.
Electric car owners may have a charger to charge their automobiles. Using blockchain technologies, vehicle owners can trade power by sharing their private EV chargers with others who need them. Owners can make their chargers available to the general public when they aren’t using them by employing specialised digital P2P charging systems.
EV owners who get power from these people will pay in cash via the digital platform. If EV owners run out of battery during a commute, they can quickly search for private chargers in their area. Power trading on a secure blockchain platform not only makes EV charging more accessible but also very affordable.
Blockchain integration would aid in managing and distributing electric power to the most required areas. As we can see, using blockchain for EV-based activities eliminates the most pressing issue with owning electric vehicles. As a result, blockchain contributes to the global adoption of electric vehicles.
Blockchain for Used EV Marketplace
The resale value for used EV’s is not significantly less than the brand new ones. There are two reasons for this trend. First, the EV’s on the road right now are no more than 3-4 years old. Secondly, the pandemic disruptions have multiplied production costs.
New EVs carry a higher price tag. So people prefer buying second-hand EVs. But buyers need to know a few things. The number of miles driven by a vehicle, its accident history, information on how often it was serviced, the condition of its interiors and electric batteries, and the performance of its safety devices and others are among the information desired.
Using blockchain-based technologies, used car dealers can generate a digital “passport” for each EV. Buyers can use such apps to verify the above mentioned information about any EV on the secondhand car market. They can even enlist the help of third-party experts to verify the information on a particular automobile.
Potential EV buyers can use such an app for verified information about used EVs. The records kept in the applications are protected from alteration, just like any other blockchain-based technology.
Blockchain is More Than Bitcoin
The general public frequently confuses blockchain with bitcoin. Blockchain can be used in various industries, including healthcare, banking, insurance, and supply chain management, to name a few.
Transparency, data security, and decentralization are three common properties of blockchain-based applications that can be used in various industries. In the case of the electric vehicle sector, blockchain-based technologies make EV networks—and thus the data held within them—extremely safe.
All of those blockchain properties can be used by the EV industry to lower vehicle production costs, establish an integrated and consumer-friendly charging infrastructure, and create a fair second-hand EV marketplace.