German automotive giant, Volkswagen has picked carVertical, a blockchain startup, as its new partner to pilot the creation of blockchain solutions for the automotive industry. The launch of the latest Volkswagen blockchain initiative was announced following carVertical’s success at an entrepreneurship pitch competition organized by German-Baltic Chamber of Commerce in Riga Latvia last month.
carVertical is a Lithuania blockchain startup that is focused on the creation of a decentralized vehicle check system. After gaining support from the European Union and raising nearly $20 million in its ICO campaign in a push for the actualization of its goals, the company was hailed as the most successful automotive-based ICO.
In an attempt to make a quick sale, dishonest car sellers often engage in odometer fraud; the illegal practice of manipulating odometers to produce deceptive mileage values. This criminal practice is on the rise and has led to distrust between car sellers and buyers. Forbes estimates that odometer fraud costs consumers $1 billion annually in the United States; the problem is even more rampant in Europe where an estimated $10.6 billion is lost every year. carVertical is hoping that its blockchain application can help solve this problem.
According to its roadmap, the startup will be heavily involved in applications dealing with decentralized vehicle registry before moving to create a practical API product in January 2019. carVertical plans to build an automobile history record app to help tackle the problem of used car fraud. The app functions as a record storage platform, where vehicle information is uploaded to its blockchain; users of the app can then access and track a car history data by utilizing its technical “passport” or the car vehicle identification number (VIN). This approach would bring decentralization, transparency, and trust back to the automotive industry since buyers would be able to track a vehicle data by themselves.
The company’s ambitious goal is finely enumerated on its website:
“Our goal is to enable every car buyer around the globe to get authentic and non-faked information about the specific vehicle and to help consumers in the maintenance of their vehicles.”
Innovation in the area of a workable decentralized car check system will be of great benefit to the automotive industry; the auto maker has seen the potential in this concept and believes that partnering with carVertical will lead to the joint development of more Volkswagen blockchain solutions.
In September 2018, carVertical will start working in Die Gläserne Manufaktur, a Volkswagen innovation hub located in Dresden, Germany. In addition to receiving €15,000 as financial support for the incubation program, carVertical will also enjoy the perks of working in a high-tech facility with excellent IT infrastructure. Additionally, Die Gläserne Manufaktur will provide the startup with access to mentors, coaches, decision-makers, and other experts within Volkswagen’s domain.
The partnership will benefit both companies, as Volkswagen will be able to establish itself as a leader in the development of automotive/transport-based applications of the future while carVertical will enjoy some valuable perks including financial support, availability of resources and expertise, and market credibility among others.
Volkswagen isn’t carVertical’s first partner; the startup also announced a partnership with GPSWOX, a provider of global GPS tracking solutions, on their blog. The goal of the partnership is to penetrate the “connected cars” market by advancing and developing automobile communication technologies in the area of Internet of Things (IoT).
In the race to create automobile applications of the future, carVertical appears to be on the right track. The blockchain startup has built a solid team consisting of both current and previous executives of car manufacturers, blockchain specialists, cyber security experts, as well as a strong board of directors.