Automotive Blockchain Market Size, Share & Trends Analysis Report By Function (Smart Contracts, Supply Chain, Financing, Mobility Solutions, Others), By Provider (Middleware Provider, Infrastructure & Protocol Provider, Application & Solution Provider), By Mobility (Personal Mobility, Shared Mobility, Commercial Mobility) and By Region(North America, Europe, APAC, Middle East and Africa, LATAM) Forecasts, 2023-2031

Market Overview

The global automotive blockchain market size was valued at USD 0.62 billion in 2022. It is projected to reach USD 7.29 billion by 2031, growing at a CAGR of 31.5% during the forecast period (2023–2031).

Blockchain is characterized as a technology that is transparent to the public and uses decentralized unanimity to maintain a network. The absence of centralized management by organizations like businesses, governments, or banks introduces high levels of data transmission security. This technology is being used by many industries, including BFSI, manufacturing, telecom, and healthcare, to improve cost and accountability. A few sectors that have benefited from Blockchain (BC) technology include manufacturing, commerce, finance, healthcare, automotive, and supply chain. Even though the automotive industry only recently became familiar with complete digitization, it still holds great promise for the future of personal mobility. The automotive industry has changed from internal combustion engines to hybrid and electric vehicles due to the development of technology.

Market Dynamics

What Are the Driving Factors for Automotive Blockchain?

Improved Efficiency of Operations in The Automotive Industry

Automotive professionals are interested in what blockchain might do for the automotive ecosystem, including how it might simplify participant engagement and open the door to new mobility business models. In addition to offering a single data source, blockchain can support device-to-device transactions, smart contracts, real-time processing, and settlement. Gains and increased operational effectiveness result in supply chain transparency, financial transactions among ecosystem participants, confirming vehicle access, and improved customer satisfaction and loyalty in the automotive industry. The development of new industrial business models, such as those involving alternative ownership, car usage, rewards programs, and other mobility services that boost brand appeal and loyalty, can also be aided by blockchain technology. Porsche, for instance, is testing blockchain applications for use in cars, including the ability to lock and unlock the car using an app, grant temporary access permissions, and look into new business models based on encrypted data logging. Blockchain features, such as consumer authentication and usage tracking across numerous mobility services, allow businesses to design customized customer experiences that result in lifelong customers.

Lower Operating Costs Are Anticipated to Drive Market Growth

The automotive sector uses blockchain technology to store information about cars, such as sales, warranty and insurance claims, and other operational costs. Previously, keeping records was done by entrusting them to outside parties or hiring a specific person to keep track of everything. But with the advent of blockchain solutions, such records and data are now kept up to date using specially created software, which lowers the cost of covering the third party's salary and other similar costs. Therefore, adopting blockchain technology in the automotive industry lowers operational costs, ultimately driving this market over the forecast period.

What Are the Challenges for Automotive Blockchain Market?

Regulation Uncertainty Is a Barrier to the Sector

In the automotive sector, blockchain technology is still in its infancy, and governing bodies worldwide have historically found it challenging to keep up with these developments. Since this technology is decentralized, no government, organization, or person can control and impose regulations on the blockchain. The General Data Protection Regulation (GDPR) was implemented across all of the European Union's (EU) member states. The "right to be forgotten" is allowed under this regulation, as is data privacy. This calls into question the technology's immutability and decentralization. Thus, regulatory ambiguity is a constraining factor that slows market expansion.

What Are the Future Prospects of Automotive Blockchain?

Improvements In Business Models Are Creating New Opportunities.

Enhancements in data management, transaction transparency, and business partner cooperation can boost loyalty and hasten the adoption of novel business models. Businesses that provide transportation services, such as car sharing and on-demand ride-sharing, must manage their fleets of vehicles safely. Blockchain could be the answer. Increase mobility while cutting waste and streamlining processes with a framework for managing intelligent contracts, authenticating vehicle access, and capturing. Information sharing, monetary payments, participant identification, and transaction tracking are requirements for mobility-as-a-service, usage-based models and other emerging mobility variations between mobile service providers, users, and even vehicles. Due to their closer relationship with the clients who will use the services, OEMs see blockchain as having more significant potential in these new business models than suppliers. Consumers and automotive companies can already use an e-commerce platform to make payments from their vehicles for various goods and services.

Regional Analysis

The global automotive blockchain market is bifurcated into four regions: North America, Europe, Asia-Pacific, and LAMEA.

North America Dominates the Global Market.

North America is the most significant global automotive blockchain market shareholder and is expected to grow at a CAGR of 31.1% during the forecast period. The U.S. and Canada are included in the analysis of the automotive blockchain market in North America. The growth would typically be fueled by two significant factors: the growing demand for immutability and transparency in business processes and significant investments in the blockchain platform by software providers. SHIFTMobility unveiled the first blockchain-powered platform for the automotive industry. The platform would enable connection, comprehension, and harness demand from various vehicles and supply chain apps, commerce channels, better diagnostics, and transportation logistics both now and in the autonomous future. Major American-based businesses like IBM, AWS, and Microsoft significantly impact local and international markets. These nations can invest significantly in cutting-edge technology, like automotive blockchain, thanks to the region's strong financial position.

Asia Pacific is expected to grow at a CAGR of 32% during the forecast period. China, India, Japan, Australia, and the rest of Asia-Pacific are all included in the analysis of the Asia-Pacific automotive blockchain market. The area has transformed into a hub for the manufacture of automobiles in recent years. The region's demand for automobiles has been fueled by the region's rapid economic growth, expanding population, growing urbanization, and greater purchasing power. The expanding automotive industry will use blockchain technology in the Asia Pacific to increase transparency and thwart fraud. However, China and India, the two largest markets for transportation products, can integrate blockchain technology into ridesharing apps. China is the world's largest automaker and a significant producer and exporter of automotive parts. During the forecast period, OEMs and Technology firms in the region will collaborate on the automotive blockchain.

Segmental Analysis

The market is segmented by function, provider, and mobility type.

Based on function, the global market is bifurcated into smart contracts, supply chains, financing, mobility solutions, and others.

The supply chains segment is the highest contributor to the market and is expected to grow at a CAGR of 32.1% during the forecast period. This is a result of rising auto sales and the development of electric vehicles, which are anticipated to strengthen the supply chain industry globally. Furthermore, the market for smart contracts is anticipated to grow at a rapid rate. The automotive industry, where smart contracts are used for B2B contracts, dealership management, and title transfer, is primarily responsible for the segment's fastest growth. Permissioned parties in the inbound chain to the plant would have a clear and transparent end-to-end view of the part location, quantity, status, and other helpful information thanks to a blockchain-based system connected with IoT sensors and bright devices.

Based on the provider, the global market is bifurcated into middleware provider, infrastructure & protocol provider, and application & solution provider.

The application & solution provider segment is the highest contributor to the market and is expected to grow at a CAGR of 31.25% during the forecast period. Investments made by Tier-1 firms and OEMs, as well as the introduction of cutting-edge blockchain solutions, are credited with the growth. Furthermore, application and solution development and maintenance costs are higher than those for middleware. As a result, the application and solution providers' revenue is higher. By providing custom product development for centralized or decentralized applications, training and development workshops, ICO end-to-end execution and management, and system integration services, the blockchain solutions provider pursues opportunities to drive revenue and profit growth.

Based on mobility type, the global market is bifurcated into personal mobility, shared mobility, and commercial mobility.

The personal mobility segment is the highest contributor to the market and is expected to grow at a CAGR of 31.73% during the forecast period. Personal mobility is one of the fastest-growing market segments. Its expansion can be attributed to rising purchasing power, quick urbanization, rising population, and robust economic growth. Likewise, it is predicted that the market for commercial mobility will grow the fastest. Blockchain can identify the digital identities of a driver, a rider, and a car in the context of personal mobility. A specific car's preferences and configuration can be linked to a person's identity. This person switches between various vehicles.

Impact of covid-19

People's lives and companies were affected by the COVID-19 outbreak worldwide. During the COVID-19 outbreak, delivery service companies confront several obstacles. Due to the tight restrictions, more people are purchasing online. In response, e-commerce and online retail & grocery enterprises faced a big issue in delivering groceries on time. By assigning delivery executives optimal routes, route optimization software helped to reduce vehicle idling time and enhance delivery executive productivity, therefore promoting the route optimization software business during the pandemic crisis.

Recent Developments

• November 2022, one of the top European IT service providers, T-Systems International, has teamed up with Tech Mahindra to open a new delivery center in Nagpur to increase its presence in India.

• September 2022, Context Labs, an Enterprise Data Fabric Climate Tech company with offices in Cambridge, Massachusetts, and Amsterdam introduced the CLEAR Path Platform. The basic building blocks, or "data," for environmental attributes and specific commodities are made transparent, secure, attested, trusted, and traceable thanks to CLEAR Path.