Event Recording

The CASE for a Vehicle Lifecycle Ledger

Log in and watch the full video!

Mobility-as-a-service is changing the way people move. From mobility based on driving your own car, it is converging to the consuming of various services using multiple modes of transportation. Ranging from eScooters, bicycles, ride-sharing to car-sharing, ride-hailing and public transport.

Log in and watch the full video!

Upgrade to the Professional or Specialist Subscription Packages to access the entire KuppingerCole video library.

I have an account
Log in  
Register your account to start 30 days of free trial access
Subscribe to become a client
Choose a package  
All right. So this is all the slides are in there. Yes. Yes. There they are. And oh, I think you took the clicker.
I'll find it for you.
Okay. So until I get my clicker, I'll just start here with a trip down memory lane. So I'm the founder and CTO of power and mobility, which is the company behind blocks move. As in this instance of our commercial lives, we specialize on decentralized mobility and also how to integrate the power sector with the mobility sector. And from a protocol perspective, we are using on the lower level. We are using blockchain essentially for secure software and also for booking. So distributed ledger technology to just make sure everybody has the right account receivable and accounts payable. And then everybody gets the right amount of money. And on the verification of things we using decentralized identifiers. So, and the background for all of this is all of the three founders come from Daimler mobility. Now it's called Mercedes-Benz mobility. So the automotive world and in the automotive world, if you look at power and mobility, which is essentially electric vehicles,
If you look at what does power and mobility mean for an OEM, or what does it mean for an asset centric economy? Then let me first define what does an asset centric economy, because everything in mobility and everything in the power sector is most definitely asset centric. So there is not a single cent of money that a company that is moving people makes that cannot be 100% attributed to the vehicle used for the transportation. So every single scent that Daimler Daimler, insurance, Daimler, rental, Daimler, sales, Daimler, leasing, whatever makes can always be one to one without failure and no gaps be attributed to this vehicle, or rather the combination of those vehicles. This is actually very manifest. If you go into any automotive or mobility or rental or insurance system that they might be operating, you will find, and again, there is no fail. You will find the primary or possibly the secondary key in your databases to be the vehicle identifier.
The vehicle identifier, the VIN is an internationally standardized way before SSI or digital ever started identifying number it's carved into the chassis of the car. Nowadays. You usually also have a reference to it on the windshield and it's globally unique. And it's actually what you call in Germany is speaking number. So if you look at the individual fields, you can read it, it speaks to you, and it tells you which brand, which model sometimes, even which factory it tells you the steering wheel is on the left on the right. So it's a speaking number, which is the, by far, by the way, the sweetest type of identifier you can probably possibly come around. So now that have posited here and I'm willing to put that to the proof that every single cent can be attributed to this very specific physical asset. Let's take this a little bit further and look at the charging stations.
And then also look at batteries the same here. You will always charge at that charging station from a mobility perspective. And from operating these transactions, a collection of charging station behaves pretty much and gets managed pretty much like a fleet. It's a immobile fleet, but it is a set of assets. And that set of assets is delivering services, which means they provide the service of parking usually, and they provide the service of charging in a purely decentralized way. You would decouple the actual delivery of the power from the rental, from providing the service of charging because there is roaming and there is something called bring, bring your own provider where essentially the power that you're getting is not provided by the company that owns the charging station that can be decoupled. And that is in fact being decoupled. So having said all of that, why am I saying this is that there is one traditionally one core identifier in all of mobility, especially if it's vehicle centric, vehicle centric, as opposed to line centric.
So trains, airlines, buses, they're not vehicle centric, mobility services. They are line centric because it doesn't matter which vehicle you sit in because you are operating the line from Shikha to Frankfurt, for instance, but ESCOs bicycles, trucking logistics fall under this 100% electric now come electric vehicle. So we have electric vehicles now, and it's very obvious that will come, that you will now not only need two identifier, one identifier, you will need two identifiers. Very simple nowadays, you will. You still don't see this because when you're financing or leasing or buying your electric car, you're essentially getting one big blob of metal and somewhere in the middle hidden for you from you. There's the battery. And you think you just bought one object, but think very simple that a car has a normally a life cycle of 15 to 25 years, a battery in the very best case eight years.
So obviously there will be a time when that battery will be replaced. So at the very latest, at that point in time, pure mathematics or logic dictates, then you're gonna take out that battery. And you're gonna put in another battery. Voila. They're obviously not the same physical asset because the physical asset of the car will be married to the physical asset to two different physical assets over its lifecycle for the battery. Why is all of this important? All of this is important because of what a very smart man who got a Nobel prize took for it called OV called the lemon market problem. The lemon market problem comes from academically speaking. If you have markets, which information asymmetry, what you end up getting is an inefficient market. The market being inefficient on two sides. The prices for the product that are being sold over the markets will be less than they could or should be when you compare it to the actual real quality of the product.
And customers will not be willing to pay fair value because they don't know they're getting cheated or not. The typical example. And a lemon is just a slang word. Now, not used much more from the us for a badly bad, a used car that's bad in shape is the proverbial used car salesman. Do you trust the use car salesman? Nobody trusts the use car salesman and even countries that pride themselves on, oh, we are so civilized. We're so secure all of these problems. They are in other countries, but not in ours. Well in the UK and in Germany where I all the numbers, 30% of odometers have been tampered with. And there's a whole market out there on eBay and Google where you cannot only have your oter meaning the number of kilometers on your car changed. No, no, no. You get smarter than that.
You get a little box cost you less than 150 pounds. Seriously, go ahead. You plug it into the car network. And it slows down the way the kilometers are being counted. So for every 10 K kilometers, you're driving, you only log six K boom. And that's an established market and widely used. So it's clear that now you have two people coming to you with a Mercedes-Benz model, 20, 20, 30 K kilometers on the odometer. I'm the one who says, all right, this is my Mercedes bent. We have the same model, Caroline and me. So Caroline looks much more trustworthy than me, but Caroline just says, believe me, it's 50 K, but now I come and say, no, no, no, you don't need to believe me here. We have used this magic blockchain immutable record with safely identified IOT sources of data to establish a golden history whereby I can prove to you.
And there's a whole narrative, of course, that you know that this car has 50 K. And in fact, looking a little bit forward, you can also see how these 50 K were in terms of driving behavior. So in my case, you know, 50 K in Caroline's case, you want to believe her, but you don't know. Now ask yourself the simple question. We both quote 30 K us dollar. Which one are you gonna buy? Unless you're fairly and squarely in love with Caroline. You're obviously gonna buy from me because I guarantee that it's 50 K kilometers. Whereas in case of Caroline, it's hope now ask yourself the follow up question. Caroline understands this and goes down 500 us $500 on the price. Do you strike or don't you strike if you play this game a little bit further, you find out that on the first wave of remarketing.
So the second hand, not the third or the fourth hand, we looking at a differential between a thousand, for small cars to 2000 or 2,500 Euro per car in price differential. Simply according to can I prove that this is really the use usage behind this vehicle or not come in with batteries. You have this at a faster page. You have the same problem. Batteries have a second life. So batteries, once they are not useful anymore for the car they get extracted. And the biggest use case that we know about now, there will be others is that you essentially bulk them up and you use them as mass storage system. So you basically collect a thousand batteries, put them on top of each other and use it as services for instance, that you can trade to the power grid for balancing, et cetera. So there's a very healthy second life for batteries going on there, which takes us to the lemon market problem, which takes us to the used car market.
Obviously, now what you want is you want to be the one that harvests the benefits of the golden history to finally refute bell price, taking paper of ALO with the lemon market problem and make the use car market not be a lemon market problem anymore and make the battery market also not be a lemon market problem anymore. And this, the use case for this is simple. This is essentially a financing question, because if I control the right residual value or the remarketing value better than you do, then I win very simple. That means either I win directly on the nominal part. So I get a higher residual value than it's obvious, but even the derivative of that, which is certainty about the residual value as such is already something that I can monetize. And for the leasing companies that are behind this, you just multiply how many 10 of millions of cars are getting leased every year. What's the average leasing contracts value. And you think 1% of difference difference, or you take the 1000 Euro that are just quoted by number of car and for the batteries. You're in the range of 200 to 900 euros. So this is humongously big business. It's never taken off. Anybody in the automotive industry will knock their head and say, this is there for the picking, but it's never taken off because it was always tried on a centralized way. Meaning one company wanted to own the whole life cycle.
So how do you now, how does this have anything to do with identity? Well, it has something to do because there's a convergence of technologies that have come together here, which now make it possible to create solutions that solve the problem. Those, the three sectors that are heavily involved here is IOT meaning smart devices. So devices that are connected to an internet, to a form of internet, and that can send you data and receive data then blockchain for decentralized, highly secure and immutable record keeping. And then last but not least secure identities. So decentralized identifiers, which themselves bring with them, cryptographic protocols, specifically the ability to do digital signatures and based on digital signatures, you get secure temp, proof data, and based on digital signatures, you also get content agreement and digital contracting. If you put those three technologies together, then what you get here is very simply put, think of the battery and the car as connected to the internet.
The car already is indirectly. The battery so far is as well. And think of both of these assets now getting an identity and which undergoes what's called in cryptographic pilots, F ceremony, which is essentially know your device, which links the physical device with in essence, a public key, which then is iden, which I then in turn links to a D I D, which gives you the ability to if data that has been signed with the private key belonging to that public key arrives in your database. You know, it comes from this device because this device was ceremonially married physically to this public key in a way that you can securely trace. In case of vehicles, the VIN is traced by your national vehicle authority. They are the ones that hold that connection. The police has access to it. The insurance has access to it. So for batteries, it'll be government or semi-government organization that will have to do this ceremony or organizations, which they delegate their, this service to.
So once you have that, then what you can do is you can basically equip each of these devices with an identifier and you are using cryptographic communication protocols to get the relevant data in the sense of relevant for the residual value, relevant of being able to calculate what is the value of the battery now, what is the value of the vehicle now? And most of all in ensuring a golden history as we call it. So from kilometer, zero, ensuring that this data is kept and maintained and stored in an immutable Tampa proof way. So come selling come reselling. You know that when you stand next to Caroline, it'll be your battery and it'll be your car that will be sold. And this is basically goes back to a whole analysis of how the automotive sector should position itself. So in the end, what you, what if you use these technologies, what you're opening up here is you are making it possible.
The battery is the best example that the life cycle and the whole industry, actually, of parties that are financing, maintaining, taking into second life, reselling your batteries can be completely decoupled from a, the customer. The customer doesn't care anymore, but it can even be decoupled from the company that is actually producing the vehicle into which they put that battery. A very practical case here is as usual. China tends to be ahead in, in terms of technology in China, the electric vehicle in question here is not the car, but it's little mini scooters that are used for last mile delivery. There is according to a number I heard a year ago, then it was 50 million of them operative in China. These are 24 hour assets and they exist in all kinds of form factors. Most of them, you haven't seen, some are foldable. Some are, you know, just look like a mini scooter would have a seat on them, wild, wild, wild, but they're working assets, which means they have pluggable batteries.
The first ones I've seen is a couple of weeks ago, Lyme has started pluggable batteries. Also finally, they walk up to something that China had already incorporated three, three to five years ago, by the way, in China, there is no gasoline scooter in Beijing anymore. Since the year 2015, every single scooter driving in China is an electric scooter. So they have a lot of experience here. So the life cycle here is very simple. These vehicles need to operate even when the battery's empty. So they go to these charging points, but the charging point is a plug point. They dump their old battery. They put in a new battery and they continue. And once you have understood this model and the first Chinese car manufacturer new is actually doing that on the car level. You very clearly see that in industry and the commercial life cycle of the battery of the vehicle and of actually the company that is putting the assets to work can be completely decoupled from each other.
And there will now be companies that do nothing else, but battery life, cycle management. And they do that. And they focus on that. But, and that basically closes the story here. They can only do that if this is not only fully automated, you can't have manual checks, forget that this is all low, low razor thin margin business. So if there's any manual, overhead to business model is dead. So this needs to be automated. And for it to be automated and often means there can be no dispute. No, no, no. That's not the case. No, no, no. I didn't drive a hundred kilometer. I only draw 15. That must also be out of the picture. So, and the only way you can do that is through these crypto technologies. That simply make it impossible for you to say no, because the fact is the fact is the fact, and this device has been onboarded into the economic lifecycle of the world through a ceremony of government, of authorized trust providers in Germany, you would have the T and the Dean and all kinds of operators that are involved with this.
And this is where you're getting your data from. So nobody's really going to challenge your data and this data is immutable. So yes, you have it in your database, but you can't change the data because if you change an Iotta on it, then you verify it with the signature algorithm and it breaks right there. So all of a sudden you have made it possible to decouple these life cycles. And usually decoupling leads to efficiency because people that specialize on one thing usually do it better than people that pretend they can do all. So what is happening here based on the fact that O T has come become mature five to six or seven years ago, based on the fact that blockchain is by now maturing and based on the fact that decentralized identifiers and very fact credential is approaching something like maturity. These type of business models will become reality and they will have to be based on digital identifiers. Fantastic.

Stay Connected

KuppingerCole on social media

Related Videos

Event Recording

Cyber Hygiene Is the Backbone of an IAM Strategy

When speaking about cybersecurity, Hollywood has made us think of hooded figures in a dark alley and real-time cyber defense while typing at the speed of light. However, proper cyber security means, above all, good, clean and clear security practices that happen before-hand and all day,…

Event Recording

The Blueprint for a Cyber-Safe Society: How Denmark provided eIDs to citizens and business

Implementing digital solutions enabling only using validated digital identities as the foundation for all other IAM and cybersecurity measures is the prerequisite to establish an agile ecosystem of commerce and corporation governed by security, protection, management of…

Event Recording

Effects of Malware Hunting in Cloud Environments

Webinar Recording

Advanced Authorization in a Web 3.0 World

Business and just about every other kind of interaction is moving online, with billions of people, connected devices, machines, and bots sharing data via the internet. Consequently, managing who and what has access to what in what context, is extremely challenging. Business success depends…

Webinar Recording

A Winning Strategy for Consumer Identity & Access Management

Success in digital business depends largely on meeting customers’ ever-increasing expectations of convenience and security at every touchpoint. Finding the best strategy to achieve the optimal balance between security and convenience without compromising on either is crucial, but can…

How can we help you

Send an inquiry

Call Us +49 211 2370770

Mo – Fr 8:00 – 17:00