Blockchain and Decentralised Finance in the Automotive Industry

Matthew Cho 

It’s 14 February 2028. Your Tesla Roadster keys dangle between your fingers as you hop into that vicious machine, pristine from yesterday’s car wash, all charged up and ready to vesicate the streets of Melbourne. Sitting in the opposite seat is your bae, your boo, your cutie-pie pumpkin. Tunes from  your date’s favourite Snarky Puppy album ripple through the speakers; your last-minute Spotify  Premium purchase does not disappoint. Being the top bloke or lady that you are, you escort your  precious one to the quintessential Valentines cuisine: the almighty Zinger Box KFC drive-through.  

But you, being you, pulled a little oopsie-daisy today. YOUR. WALLET. HAS. PERISHED. But panic, you  do not. Why? Because you’re already broke. No, that’s not true. I mean, it is… but that’s not the  reason why your bowels and innards are currently not wrenching from anxiety. It’s because Car  eWallet has got you covered, yet again.  

In fact, yesterday’s car wash, this morning’s Tesla Supercharger fee, the Spotify purchase, the toll on  your way to KFC, and the drive-through meal – they were all paid via Car eWallet, a DeFi  (decentralised finance) blockchain platform that transforms your car into an autonomous financial  entity capable of executing real-time payments. In short, your car is your new wallet.  

Forget Apple Pay. Car eWallet is the future. 

Hmm… sounds too good to be true. 

No! This anecdote isn’t some hypothetical parallel universe phenomenon (maybe except for the bit  where you get a date). It’s taking place at this very moment, and ZF Friedrichshafen’s Car eWallet is a  major player in this financial paradigm shift.

Remember back when the smartphone industry first introduced mobile payment services? That was  a revolution – a revolution that now facilitates billions of instant payments, all within a wireless and secure global network. Car eWallet is exactly that, but for… you guessed it: a network of cars. 

With blockchain technology at its core, Car eWallet operates on a cryptocurrency-based payment  system that automates and consolidates a driver’s transactions. Imagine driving through servos and  grocery pick-ups, or seamlessly paying for infotainments, parking memberships, car insurance, and  even new tyre purchases, all through a single subscription. Simplification at its finest, I’d say. 

Yeah, ok whatever. I’m still not convinced. Other benefits? 

Glad you asked. Here’s one: reformed ridesharing. Blockchain-based solutions like Car eWallet give vehicles financial autonomy over executing transactions, enabling car owners to monetise trips. By linking smart vehicles with rideshare providers and end-users, the system can automatically process  trip payments following the completion of a ride without human intervention, which is integral to  the expanding autonomous vehicle market. Cars would be insured on a time-basis determined by each trip’s duration, while vehicle ownership would be transferrable between ride-sharers – a  concept already offered by EY’s Tesseract platform. Transforming vehicles into such auto-sustainable  assets facilitates a more cost-effective and flexible ridesharing mechanism. 

Partnerships between automobile and fintech companies in the ridesharing domain are increasingly  prevalent, with Ford recently investing USD 1 billion on a joint project with Uber and Argo AI. On the  contrary, two dominant players in the car-sharing industry, ZipCar and DriveNow, exited the Belgian  market in 2019 “due to lack of rentability and failing at reaching critical size”; solutions like Car  

eWallet could give such ridesharing companies a new life. 

But wait, there’s more! Another potential implementation of car wallets is assigning a financial birth  certificate to a vehicle, then tracking every transaction related to its maintenance and overall  condition, from initial manufacturing processes to ownership history and aftermarket component purchases. Compiling such an elaborate logbook would establish an unprecedented degree of  credibility for consumers when buying and selling used cars. 

Car eWallet, Car eWallet, Car eWallet… By now, you’re probably wondering, are there other  companies also riding this wave of fintech revolution? Of course! Lucy Hakobyan is leading the  Mobility Open Blockchain Initiative at RIDDLE&CODE to develop a “distributed-ledger-technology based vehicle identity, … unlocking potential for vehicle-to-infrastructure payment with a car  wallet.” Meanwhile, the general manager of Mobile at FIS, Doug Brown, agrees that “smart car  wallets are likely to be as indispensable as smartphones.” 

Ok, I get the point. But… what’s all this blockchain stuff? 

In simple terms, blockchains are distributed ledgers that store immutable records of time-stamped  data, predominantly monetary transactions between two parties. As you’re probably aware, Bitcoin  and Ether are examples of blockchain-powered cryptocurrencies.  

Now, there are several features of blockchain that make it a far superior mechanism over traditional  databases for storing and executing transactions. Firstly, blockchain transactions are encrypted and  immutable. That is, “blocks” of data are only readable to the transaction’s stakeholders and cannot  be altered once attached to the overall chain, immunising the ledger against fraud and cyberattacks. But more importantly, blockchains are distributed via a network, whereby every member receives a 

replica of the ledger. This ensures that no entity can grant itself central authority over the storage  and execution of transactions – the essence of decentralised finance.  

Such transparency and security ultimately mean fewer disputes and increased trust amongst parties,  lubricating transactions between car wallets and companies.  

I see I see. Where to from here then? 

Car wallets provide a mere glimpse into the far-reaching potential of blockchain and DeFi in the  automotive industry. A vehicle owner’s driving behaviour like speeding and collision could also be  stored on the blockchain, enabling insurance firms to create personalised insurance contracts and  automate financial settlements. Transparency of data regarding a vehicle’s condition will further  assist financiers in accurately gauging residual values of leased vehicles. Meanwhile, blockchains  could enhance manufacturing finance by expediating export/import processes via instant  distribution of banking documentation between the parties managing each step of the supply chain.  

Elon Musk’s words ring alarm bells: “Connected, autonomous cars require great software.  Advanced factories also require great software. Yet, the car industry is not very good at software.” But beware Technoking. DeFi is about to change all that. 


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