Automaker Blockchain Bid to end Used Car ‘Clocking’

Blockchain security technology is being used to prevent pre-owned vehicles having their digitally recorded mileage altered, or ‘clocked’, by unscrupulous sellers.

The process of ‘correcting’ a vehicle’s recorded mileage is on the rise with the popularity of hire-purchase schemes for new vehicles. That’s because the financing schemes usually stipulate a limited mileage agreement which, if exceeded, entails punitive charges.

In response many leasers are turning to auto electronic companies offering a service to correct mileage readings through the car’s on-board computer as opposed to the old analogue way of employing an electric drill set on reverse. The service is completely legal in many countries although the selling on a vehicle or returning it to the lease company with a falsified mileage reading is not.

Naturally, this growing trend is threatening the residual values of modern pre-owned vehicles and this is where automakers including Ford, Honda and BMW have joined with other transportation and blockchain leaders in a bid to slow these practices. They have set up a nonprofit start-up developing technology to better track and protect vehicles’ true identities.

The Mobility Open Blockchain Initiative (MOBI)’s member-led Vehicle Identity (VID) II Working Group has released the second installment of the industry’s vehicle identity on blockchain. The VID II Standard uses the VID I Standard, or vehicle birth certificate, to describe the use of VID in a variety of practical use cases. The two use cases focused on by the working group (WG) are vehicle registration and maintenance traceability. Vehicle registration on blockchain allows formerly disconnected vehicle registration systems between states and countries to connect using a secure, shared, and trusted ledger. Maintenance traceability will provide a tamper-proof history to buyers, regulators, and insurers, therefore reducing vehicle information asymmetry.

MOBI’s VID II Working Group is co-chaired by BMW and Ford, with support from Accenture, AWS, AutoData Group, Bosch, Car IQ, DENSO, DMX, Hitachi America, Ltd., Honda, IBM, Kar Auction Services, Luxoft, Quantstamp, Ownum, and USAA.

Additional use cases for VID include supply chain, automotive financing, electric vehicle charging, autonomous vehicle data exchange, and much more. VID II improves asset visibility, creating an anchor for additional use cases, data provenance, and autonomous economic agents.

BMW’s Andre Luckow, head of emerging technologies, said: “At BMW we strive to create seamless digital solutions. The reference architecture in the VID II standard is a crucial building block in the transformation to a frictionless and trusted mobility ecosystem.”

Cynthia Flanigan, director, vehicle research and technology, Ford Research and Advanced Engineering, added: “Ford believes this research into vehicle identity technology could lead to better ownership experiences. We also think this technology could help simplify the purchasing process in the future.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_