Auto giant Wanxiang announced today that it will use blockchain technology as part of its newly announced smart cities initiative.
Revealed at the Wanxiang-sponsored Global Blockchain Summit, the company intends to invest ¥200bn ($30bn) over the next seven years into a project that will find it purchasing 83 million square feet of land in Hangzhou on which it will build a new development designed to promote technology innovations.
To better support this effort, Wanxiang is also seeking to fund blockchain entrepreneurs working on efforts that may be aligned with its objectives.
Wanxiang vice chairman and executive director Feng Xiao told CoinDesk:
“We can’t tackle all the use cases that might arise from the smart city project. That’s why we’re opening it up to use cases from all over the world.”
The move is the latest that finds Wanxiang emerging as one of the most aggressive enterprise firms in embracing blockchain technology.
In mid-2015, a Wanxiang-owned subsidiary purchased $500,000 worth of ether, the native cryptocurrency that powers the public ethereum blockchain, while its parent company launched Fenbushi Capital, a $50m venture fund focused on blockchain.
Though no government is involved in the Wanxiang smart cities project, the concept is similar to other efforts globally. Earlier this year, Dubai’s government innovation arm revealed it is seeking to incorporate blockchain as part of its smart cities effort.
Representatives from Wanxiang said it is in talks with IBM and Microsoft on how they might support the effort.
Smart cars
While grand in scope, the announcement also included details about how Wanxiang might incorporate the technology into its main product lines. For example, Wanxiang is seeking to use blockchain as a way to cut the cost of its electric cars by using it to help confirm and enforce property rights.
“We want to use blockchain to manage IoT, and use it help devices to interact with each other. Smart appliances can be managed with blockchain,” Feng told attendees today.
Wanxiang, which owns US electric car maker Karma, announced earlier this summer it would build a $375m plant to produce battery-powered vehicles, and here, too, Feng said he sees applications for blockchain.
One example Feng said has strategic importance is using blockchain for battery tracking. Wanxiang intends to lend out the batteries to car buyers, while retaining ownership of the devices, as a way to reduce the upfront cost for purchasers.
In this instance, he said Wanxiang would register its batteries on a blockchain, and use a blockchain system to monitor their use.
“We see the blockchain creating a way to track all the batteries through their lifecycle so we know when we can bring it back,” he said. “That way we can reduce the cost of our cars.”
Today, Wanxiang monitors and collects data from its batteries, but that the company believes blockchain might prove more effective. By ensuring data integrity, he said, better analysis might later be conducted.
Someday, Feng said, Wanxiang could not only improve its cash flow with blockchain, but create new financial products for this goal.
“There could be a way for us to securitize the battery and make it into some sort of financial product, to sell it out to financial institutions in order to get more cash flow,” he added.
Overall, he said he remains confident that the technology can meet its potential and help drive the larger smart cities initiative, concluding:
“Even if you fail, the cost is minimal.”
Update: An earlier version incorrectly stated that Wanxiang Blockchain Labs, not Fenbushi Capital, received $50m to fund blockchain startups.
Image via Pete Rizzo for CoinDesk