Dan, a proud EV (Electric Vehicle) owner and user, has never driven his EV car to the countryside. Call it his skepticism or the lousy reputation EVs have earned, but Dan prefers EVs for shorter distances and gasoline-powered vehicles for long routes.
An electric vehicle (EV) uses an electric motor powered by a battery, unlike regular vehicles that use a gasoline tank and an internal combustion engine. EVs can be charged from an external source, like a wall outlet or charging equipment.
Electric vehicles (EVs) are revolutionizing the transportation industry, but issues like transparency, range anxiety, and charging infrastructure still need to be addressed.
Nevertheless, almost all countries promote EVs, and many consider them the future.
For instance, in 2023, 93% of car sales in Norway were EVs. In China, 60% of new car registrations were for electric vehicles.
Many countries, such as Canada, the US, Germany, France, India, Japan, the Netherlands, etc., have passed laws and directives to promote EVs. A total of 16 countries have some form of policy mandating 100% EV sales by 2035.
Challenges EV Owners Face
EV cars and vehicles are taking over the roads worldwide, yet there’s a lingering sense of lack of reliability associated with these green vehicles.
EV owners’ worst fear is that the vehicle’s battery won’t last long, and long drives may be better avoided if the vehicle is an EV.
Contrary to popular notion, a typical EV battery can power a journey of 110 to 300 miles. That’s quite a distance. A Tesla Model S can travel 550–570 km on a single charge, while a lucid Air Pure can do 348 miles.
Another fear among EV owners is that they won’t find a charging station in time if the battery dies down. And truly so, more often than not, the public charging infrastructure has reliability issues like malfunctioning equipment, inconsistent charging performance, and out-of-service stations.
EV vehicles are also more costly than regular vehicles, and batteries often degrade over time and may be expensive to replace. Despite powering a sustainable and energy-efficient mode of travel, EV batteries can also have an environmental impact. There aren’t many methods to verify whether the manufacturers are taking proper measures for proper sourcing.
Batteries and car parts are manufactured across continents, from African mines to factories in Asia to automobile assembly lines in Europe. Most consumers are environmentally conscious and want to have more transparency into what goes into such EVs and, ultimately, how they are disposed of.
Also, provision for better visibility into the network of EV stations, the working condition of each charging port, availability of ports, price of energy at these stations, and easy mode of payments can alleviate many of the challenges EV vehicle owners face today.
How to Tokenize an Electric Vehicle
Tokenization is the process of representing a real-world asset, like an electric vehicle, as a digital token on a blockchain. For instance, every EV manufactured could be minted as a unique token, embedding important information like the vehicle’s battery origin, mileage, and environmental impact.
Imagine a manufacturer like Tesla creating a digital token for each car that records every significant detail about the vehicle, such as the sourcing of its lithium-ion battery, its carbon footprint, and maintenance history. This information becomes immutable once recorded on the blockchain, ensuring transparency and trust between manufacturers, consumers, and regulators.
One of the biggest concerns for EV owners is the availability of charging stations. Tokenization could provide a solution by tracking charging stations and their real-time status. Suppose each charging station is represented by a digital token. This token would update in real-time, providing information about the station’s location, availability, pricing, and energy source (whether it’s renewable or not).
For instance, if you’re driving an EV and need to charge up, your app could show you nearby stations with available slots, the type of energy being used, and the exact price — information that’s all recorded on the blockchain. Knowing this makes long trips less stressful and gives drivers confidence that they’ll find reliable charging.
Tokenized Payments for EV Charging
Tokenization also simplifies payments. Instead of using traditional payment methods, EV drivers could pay for their charging using digital tokens. For example, an EV owner could receive renewable energy tokens that can be redeemed at specific charging stations. These tokens would offer discounts or rewards for using clean energy.
Say you’re driving an electric car and stop at a station that supports tokenized payments. Instead of swiping a credit card, you use your EV tokens, which are linked to renewable energy sources. These tokens could even come with rewards for sustainable choices, making the payment process smoother and more eco-friendly.
Ethical Sourcing Through Tokenization
Electric vehicles rely on materials like lithium, cobalt, and nickel, which are sourced from all over the world. Tokenization allows the tracking of these materials from mine to manufacturer, ensuring that ethical and environmentally sound practices are followed.
For example, imagine a scenario where each batch of lithium used in EV batteries is tokenized on the blockchain. A token would be created at the mine, carrying data about how the material was extracted. As the lithium is processed, transported, and used in battery production, the token is updated, showing the entire supply chain’s journey. Consumers can scan a QR code or check the blockchain to verify that the battery in their EV was ethically sourced, offering unprecedented transparency.
Tokenization for Carbon Footprint Tracking
Another powerful use of tokenization is tracking the carbon footprint of each EV in real-time. A car’s carbon footprint includes not only the emissions generated during its use but also the energy source used to charge it. Tokenization allows the creation of a carbon token that records these details.
So every time you charge your EV, the carbon emissions or clean energy usage is recorded as part of a token. Over time, you can track how much renewable energy you’ve used, and your car’s overall environmental impact. Manufacturers can also use this data to create more eco-friendly models, while consumers can earn tokens for minimizing their carbon footprint, making EV ownership even more rewarding.
Tokenization for Sustainable Driving Initiatives
Governments and organizations can incentivize sustainable driving through tokenization. For example, drivers could earn green tokens for using renewable energy at charging stations, which can be redeemed for rewards like discounts, free charges, or even public recognition of their contributions to sustainability.
This means driving your EV across the country and charging only at stations that use wind or solar power. You accumulate green tokens for each sustainable choice you make. At the end of the year, these tokens can be exchanged for rewards or even tax benefits, helping to promote eco-friendly driving behaviors.
The Future of Tokenized EVs
The potential of tokenized EVs is immense. As electric vehicles become more widespread, tokenization can help make them more transparent, efficient, and accountable. From tracking the ethical sourcing of materials to providing seamless payment systems and real-time carbon tracking, tokenization offers a way to make sustainability a core part of the EV experience.
TokenFi is pioneering these efforts, bringing solutions like the TokenFi RWA Tokenization Module that can tokenize any asset, including EVs. As more companies adopt blockchain and tokenization technologies, we’ll see the EV industry become more transparent, accountable, and aligned with the goals of sustainability.
TokenFi is focused on making asset tokenization (except for securities) simple and accessible for everyone, not just institutions. With the TokenFi RWA Tokenization Module, users can tokenize assets easily, without needing any coding knowledge. In addition, upcoming tools like TokenFi Connect will allow businesses to smoothly integrate blockchain into their operations. The AI Smart Contract Auditor will further ensure that tokenized assets are secure by providing automated audits and detailed security reports, helping businesses maintain compliance and trustworthiness in their operations.
