• How China’s Automobile Manufacturers Are Using Blockchain to Reduce Costs

  • China’s auto sector is following in the footsteps of multinational automakers such as BMW, Mercedes-Benz, and Toyota by implementing blockchain technology for data recording and cost reduction.

    Some big worldwide automakers have begun to use decentralized ledger technology to reduce costs by strengthening the supply chain.

    It went on to say that even before the Lunar New Year began, the central government in Beijing had designated 15 pilot locations and recognized a few areas for the “innovative application” of blockchain technology.

    Shanghai, Beijing, and Guangzhou are among the areas included in the trial zones. Furthermore, 164 entities including banks, hospitals, electrical utilities, and local government departments were chosen to participate in the project’s initial investigation.

    The trial run featured SAIC-GM-Wuling, the Chinese automaker behind the best-selling Hongguang Mini EV.

    Hundreds of suppliers supply the Liuzhou-based firm with over 900 components needed to produce automobiles. The transactions are in the millions of dollars, making inventory management a big burden.

    In addition, the method exposes the organization to potential human errors, such as indistinguishable signatures and paperwork going missing during portion handovers.

    Adoption of blockchain technology will result in increased efficiency and decreased CO2 emissions.

    SAIC-GM-Wuling anticipates that blockchain, or decentralized distributed ledger technology, would increase supply chain efficiency, improve transaction records, and minimize reliance on paper. The company spends up to $2.5 million every year on approximately 10 million sheets of paper.

    Mercedes-Benz said in late January this year that it would utilize blockchain technology to track and monitor carbon dioxide emissions, including secondary material with the complex supply chain of the mineral cobalt used to build batteries.

    The luxury automaker wishes to promote transparency in CO2 emissions throughout the cobalt supply chain.

    Using blockchain technology, BMW began a campaign in 2018 to demonstrate that the batteries it uses in its electric vehicles contain only clean cobalt.

    In addition, Volvo, which is owned by China, has employed blockchain technology to demonstrate that the materials used in its manufacture are ethically sourced.

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