Automakers, suppliers team up to develop blockchain technology

A group of auto and tech companies have formed a consortium to develop automotive uses for blockchain, the database technology known for its use in cryptocurrency.

MOBI, the Mobility Open Blockchain Initiative, said Wednesday at a conference in Dubai that General Motors, BMW, Renault, Bosch, ZF Friedrichshafen and IBM would be among its initial members. The group is helmed by industry veteran Chris Ballinger, who last month left his role as CFO and head of mobility services at Toyota Research Institute.

Blockchain is "a technology where the network effects will be very strong," Ballinger said. "If you're not in at the very start, it may be too late."

The consortium will work to ensure blockchain-based services can play nice with vehicles from multiple brands to avoid an annoying scenario in which a car can't transact with a system it's not compatible with. It also will host educational seminars for members.

Blockchain technology is considered to be an unhackable financial transaction system because it uses a decentralized network. Proponents argue that the lack of a central management authority ensures that the data is virtually tamper-proof, as nefarious actors would need to hack multiple data storage locations to alter information.

There could be many practical uses for blockchain in the automotive industry, such as allowing consumers to pay for tolls and electric vehicle charging stations as well as creating public records that track vehicles and parts in the supply chain. The technology's rise, however, in the shadowy world of cryptocurrency bitcoin, has left some companies hesitant to embrace it.

"It's a big buzzword, but very few people understand it," said Sachin Lulla, IBM's automotive lead. "Which is why these consortiums play a big role; they bring the technology to life."

ZF and IBM are collaborating with financial services firm UBS on the supplier's Car eWallet product, showcased at this year's CES tech trade show in Las Vegas. EY, the consulting firm, also has a blockchain-based platform for automotive.