A coalition of automotive OEMs and distributors has launched a pilot program using blockchain-embedded packaging data to trace auto parts across international supply chains. The initiative targets counterfeit infiltration, recall inefficiencies, and unverifiable sustainability claims - three persistent pain points in global automotive logistics.
The program builds on established consortium frameworks and emerging regulatory mandates, representing one of the most operationally direct applications of distributed ledger technology to packaging and parts traceability to date.
Background
The automotive industry's vulnerability to counterfeit parts has grown alongside the complexity of its cross-border supply chains. According to the Automotive Aftermarket Suppliers Association (AASA), the U.S. industry alone loses approximately USD 3 billion annually to counterfeit service parts, with global losses estimated at around USD 12 billion. Counterfeit parts pose serious safety risks and cause financial losses for manufacturers and customers alike; these components are often difficult to distinguish from genuine ones and infiltrate supply chains through unauthorized suppliers.
Regulatory pressure has intensified in parallel. Demand for transparency and security in automotive supply chains has surged, driven in part by the EU's R155 cybersecurity regulation, which mandates parts traceability. Looking further ahead, the EU's Digital Product Passport (DPP) - a digital data container designed to enhance transparency, traceability, and circularity - is already being piloted through the Battery Passport under Regulation (EU) 2023/1542, which imposes digital data requirements for certain battery types from February 2027.
Automakers have been exploring blockchain-based solutions for years. The Mobility Open Blockchain Initiative (MOBI), co-founded in 2018 by BMW, Ford, General Motors, Renault, and Honda, was established specifically to develop interoperable standards for vehicle identity, supply chain tracking, and mobility services. MOBI implements key technical standards including W3C Verifiable Credentials and W3C Decentralized Identifiers (DIDs), and has developed specifications such as the Vehicle Identity (VID) standard and Battery Birth Certificate to enable trusted data exchange.
Details
The current pilot extends blockchain traceability into the packaging layer itself, embedding verifiable data directly onto part packaging so that provenance, handling, and sustainability credentials travel with the physical shipment across borders. Unlike earlier supply chain blockchain initiatives, this approach anchors the chain of custody in the packaging rather than in back-office records alone, making verification accessible at each node of the cross-border journey.
Automotive companies are favoring private and consortium blockchains to maintain data control while enabling secure collaboration with suppliers and partners. This allows participating parties to exchange vehicle history, compliance, and production data without exposing sensitive intellectual property.
In February 2025, BMW partnered with VeChain to apply blockchain-based provenance tracking to EV battery parts, strengthening traceability and reducing counterfeiting risk. In Europe, Germany and France are leveraging blockchain to support digital product ePassports, while OEMs and Tier-1 suppliers are developing consortium-based platforms for end-to-end parts tracing and warranty verification.
In Asia Pacific, China, Japan, and South Korea are deploying blockchain to streamline supply chains and counter fake components. South Korea has specifically planned to trial hybrid blockchain use cases for tracking cross-border automotive component positions and EV ecosystem integrity.
The pilot must navigate significant governance complexity. Interoperability limitations remain a major hurdle across jurisdictions with divergent data-sharing rules and intellectual property protections. Consortium blockchain architectures offer strong efficiency but are only partially decentralized, which can make it difficult for primary supply chain members to maintain full control. Data governance protocols - determining which participants can read or write specific fields - are among the key variables the pilot is designed to test.
The global automotive blockchain technology market was valued at USD 300 million in 2024 and is projected to grow to USD 3.77 billion by 2034, at a compound annual growth rate of 29%, according to Global Market Insights.
Outlook
The EU's Digital Product Passport is rapidly moving from policy concept to legal reality, with its impact now extending from regulation into market enforcement, standards development, supply chain compliance, and technology adoption. A horizontal DPP system specification through CEN/CENELEC JTC 24 is expected between late 2025 and 2027, while the Digital Battery Passport becomes mandatory in February 2027 for EV, industrial, and light-transport batteries exceeding 2 kWh. Industry participants expect the pilot's findings on cross-border data governance and packaging-layer traceability to directly inform how OEM consortia respond to those mandates. If the pilot demonstrates reliable audit trails at customs boundaries, broader rollout across multi-tier supplier networks is anticipated within 18 to 24 months.
Related reading: Smart Packaging Advances in Auto Spare-Parts Logistics
