Automotive Blockchain Market Assessment, By Application [Financing Mobility Solution, Smart Contracts, Supply Chain], By End-user [OEMs, Vehicle Owners, Mobility as a Service Provider, Others], By Provider [Application and Solution, Middleware, Infrastruc

Automotive Blockchain Market Assessment, By Application [Financing Mobility Solution, Smart Contracts, Supply Chain], By End-user [OEMs, Vehicle Owners, Mobility as a Service Provider, Others], By Provider [Application and Solution, Middleware, Infrastructure and Protocol], By Mobility [Personal Mobility, Shared Mobility, Commercial Mobility], By Region, Opportunities and Forecast, 2017-2031F

Global automotive blockchain market is projected to witness a CAGR of 22.45% during the forecast period 2024-2031, growing from USD 1007.07 million in 2023, to USD 5090.14 million in 2031. The automotive sector is going through multiple changes that further create new challenges. The automotive industry witness different challenges related to the supply chain, several manufacturing stages, regulatory compliances, and after-sales service. The advent of electric and autonomous vehicles has increased demand for a data-based solution. Blockchain technology is vital in cutting costs, ensuring a smooth supply chain, optimizing multi-stage procedures, and keeping accountability.

Additionally, blockchain technology helps both automotive vendors and end-users. From tracking a vehicle's service history to bolstering supply chain management, the technology helps different stages of automotive sales, manufacturing, and after-sales. Automotive giants upgrading their supply chain accounts are projected to fuel the automotive blockchain market. Increasing focus on reducing transaction time and rising concerns over data theft and transparency are pushing automotive and equipment dealers to adopt blockchain technology. Automotive giants are utilizing blockchain platforms to develop specific solutions.

For instance, in February 2023, Automotive giant, Toyota Motors sponsored Aster Network's hackathon to get a blockchain solution for itself. The developers built an intracompany decentralized autonomous organization (DAO) that allows highly efficient decision-making and team management functions.

Boosting Supply Chain and Cutting Cost Opportunities to Increase the Blockchain Adoption

The automotive sector includes complex transactions between vendors, distributors, OEMs, and service providers. Blockchain technology makes these operations streamlined. Blockchain technology ensures transparency between different participants of a project or transaction, which helps automotive companies maintain accuracy. Integrating blockchain technology with various aspects of the automotive sector collects, tracks, and shares data at various stages of supply chain management (SCM).

Transparency, higher accountability, and streamlined data positively impact the cost dynamics for automotive makers. Streamlined operations create cost-cutting opportunities for automotive businesses. Blockchain tools ensure the flow of raw materials, hence higher productivity. Furthermore, blockchain technology helps manufacturers trace regulatory compliances without human intervention and control. Blockchain tools help in the virtual testing of automotive applications of artificial intelligence and machine learning.

For instance, in December 2022, BMW GmbH revamped its operations with Coinweb and BNB Chain’s blockchain technology. The layer-2 cross-chain computation platform, Coinweb integrated with automotive giant BMW to help the company with efficient financial transactions. The BNB Chain, owned by Binance, would work as the backbone of the program as it is highly efficient, cost-effective, and fast.

High Sustainability and Evolving Automotive Industry to Fuel the Market Growth

Automotive brands adopt different technologies to deliver sustainable vehicles while ensuring eco-friendly manufacturing. Blockchain technology helps streamline standard data provided while virtually designing vehicle components. Therefore, it reduces prototype failures and tests vehicles with accuracy. The advent of electric and autonomous vehicles is expected to add value to the automotive blockchain industry. Blockchain technology is expected to power new manufacturing, retail, and distribution channels.

For example, in October 2023, the Nissan Formula E team used blockchain technology provided by UAE-based software company Coral to increase awareness of the importance of carbon credits and help the global decarbonization program. The Nissan E team will use the technology in the 2023/24 ABB FIA Formula E World Championship. The Nissan Formula E team and Coral would follow a Greenhouse Gas Protocol and Science Standard framework to track the carbon footprint of the racing team and ensure transparency.

Government Focus on Higher Vehicle Security to Propel the Market Growth

Government promoting sustainable measures and vehicles is projected to further drive the market. The government authorities are constantly pushing for the adoption of the latest technologies like connected car technology, autonomous control, and vehicle-to-vehicle communication. There are many cases in the automotive sector where blockchain can drive innovation and address some challenges growing exponentially.

The government integrates blockchain technology with automotive insurance, dealing with crucial personal information related to individuals and their vehicles. The technology streamlines the data to filter vehicles without insurance, helping government regulatory bodies to act accordingly. Governments partner with blockchain technology vendors to introduce it to different sectors, including retail, healthcare, and automotive.

For instance, in January 2023, the Indian government launched its blockchain module with crypto-oriented 5ire Chain Techno Pvt. Ltd., a Network Capital. The initiative has been launched under the government’s National Institution for Transforming India (NITI) Aayog’s Atal innovation mission plan.

Applications and Solutions Lead to Higher Adoption Through OEM Platforms

Based on providers, application and solution segment dominates the global automotive blockchain market. The growth is attributed to the adoption of blockchain technology by a larger section of automotive OEMs, as it requires solutions for complex transactions, supply chain management (SCM), and R&D projects. The blockchain applications focus on creating reports while disseminating the data among concerned departments, ensuring transparency. Furthermore, the application and solution providers charge higher amounts and hence hold the major revenue share in the provider category of the market. Additionally, blockchain technology is a safe and secure network that can hardly be manipulated. It prevents data leaks through the accurate application of cryptography. Multilayered authentication and easy deployment, delivering an edge to the application and solution segment over the other segments.

For instance, in August 2023, Mitsubishi Motors Europe announced that it would deploy Vinturas’s Cloud-based interoperable network solution (INS). The solution would be integrated into its new generation ASX and the latest COLT models and provide a secure and private vehicle tracking ecosystem.

North America Dominates Automotive Blockchain Market

North America is the leading consumer of the global automotive blockchain market. The region holds a significant share of the market. America is the home to major technological companies that provide solutions to many verticals. The United States is home to blockchain technology giants like IBM, Microsoft, and Helbiz. The automotive brands originating from North America are adopting blockchain solutions at a major scale to enhance productivity and save capital. Furthermore, the factors attributed to the increasing demand for automotive blockchain are the rising requirement for transparency and better data management.

Also, Asia-Pacific's research environment and deployment of the latest technologies are not missing on automotive adoption of blockchain technology. Major OEMs are testing different blockchain pilots to utilize these platforms for better regional productivity and transparency.

Future Market Scenario (2024 – 2031F)

The easy tracking of carbon footprints, advent of battery-based vehicles, and increased adoption in emerging economies, like India and China, are projected to propel the market growth.

The government's push for sustainable manufacturing pushes automotive manufacturers to adopt various blockchain technologies.

The authorities push for regulatory compliance on data security and transparency, which is anticipated to increase the demand for automotive blockchain solutions.

Leading automotive companies are expected to adopt blockchain-based solutions for AI integration and IoT deployment.

Key Players Landscape and Outlook

Key players in automotive blockchain market follow a solutions-based approach while building blockchain tools and software. The technology vendors try to make their platform inclusive while adding elements like customization, enhanced data protection, and streamlined workflows. Furthermore, the major players collaborate with automotive brands, government vehicle insurance entities, etc.

IBM Corporation helps the automotive industry with its blockchain services. The service taps innovative mobility services, supply chain traceability, and trustworthy financial transactions. The blockchain technology helps the vehicles in complex networked software platforms. The company delivers blockchain-backed car eWallet service through IBM cloud platform. The platform has been built through IBM’s partnership with ZF and UBS bank.

Tech Mahindra has collaborated with Netherlands-based startup Quantoz to deliver Blockchain-as-a-Service (BaaS) for secure transactions. The collaboration helps the automotive industry in creating a smooth payment gateway for automotive OEMs, triggering new revenue streams through third-party ecosystem.