Volkswagen is testing blockchain as a way to prevent odometer tampering and allow secure control over access to cars. With these pilot projects, it leapfrogs many carmakers by considering uses beyond business applications.

“Blockchain technology has enormous potential,” VW IT spokesman Jonas Alexander Kulawik tells ThirtyK.Our experts are doing pioneering work. They’re still developing and testing solutions. The company’s engineers currently are experimenting with multiple crypto technology platforms, so it’s too soon to speculate about when solutions may be commercialized, he says.

The goal is to make the used car market for VWs more transparent and secure, the company says.

These moves are more positive news for the German company after the enormous backlash stemming from its 2015 admission that nearly 600,000 cars sold in the U.S. were fitted with “defeat devices” designed to circumvent emissions tests.

The blockchain-based mileage clocking system VW is testing allows each odometer reading to be saved, making it impossible for odometer fraud to go unnoticed. The National Highway Traffic Safety Administration estimates this problem costs car buyers more than $1 billion a year. Drivers can save their mileage data on a distributed ledger at regular intervals, and those data can’t be tampered with. The goal is to make the used car market for VWs more transparent and secure, the company says.

“With this approach, we can assume the vehicle history will be more accurate and verifiable,” Dionis Teshler, CTO, at automotive cybersecurity firm GuardKnox Cyber Technologies, tells ThirtyK. “It will be harder for potential sellers to skew the truth about the condition and usage of the vehicle,”

Virtual Keys 

Meanwhile, VW’s Porsche division is working with digital infrastructure startup company XAIN to develop a blockchain solution to make it easy for Porsche owners to open their cars, even from afar. They’ll also be able to give “virtual keys” to others to use to open their vehicles. For example, car owners could allow a delivery person to open the trunk to drop a package inside. The system will provide real-time notifications about who accessed the car, when and where. Eventually, Porsches may share traffic data with other vehicles.

Integrating blockchain isn’t straightforward. “Knowledge of the technology is required by the original equipment manufacturer as well as by the suppliers, which makes evaluating products and suppliers more challenging,” Teshler says.

Additionally, automobile computers weren’t chosen originally with blockchain in mind, so finding the right hardware can be challenging, “especially since automobile computer architectures change only every seven to 15 years,” Teshler says. Automakers also must develop robust testing standards for any new technology, which amplifies the challenge.

While blockchain can solve some problems, “it seems to be a hammer looking for a nail,” Antino Kim, assistant professor of operations and decision technologies at Indiana University, tells ThirtyK. “Carmakers must first understand the technology and the return on investment. Do we really need blockchain for tamper-proof odometers?

Kim advises carmakers to look first at existing problems and solutions and determine whether blockchain may be better. “That should be the first question they should ask, though certainly not the last.”

Gail Dutton
Gail Dutton is a veteran journalist who has interviewed several Nobel laureates as well as leading innovators in the fields of biotechnology, IT, and business. She has written for a variety of trade and consumer magazines, including Forbes, Entrepreneur, The Scientist, Genetic Engineering & Biotechnology News, Life Science Leader, Data Center Knowledge, and Data Center Manager, from her office in Washington state.