The increasing focus on reducing data leakage and manipulation will fuel the demand for the automotive blockchain market.
The automotive blockchain market is projected to grow at a CAGR of 31.19% during the forecast period, and the market size is projected to grow from USD 0.35 billion in 2020 to USD 5.29 billion by 2030. The automotive industry is a complex connected ecosystem with multiple transactions involved. There is a need for an immutable database to record these transactions with shared, secured, and highly permissioned access. In response, many OEMs have initiated pilot projects on automotive blockchain to bring the transparency of information in the business network, which accelerate the growth of the automotive blockchain market. For instance, French automaker Renault unveiled a new digitized car maintenance log prototype built using blockchain in July 2017. At the same time, uncertainty over regulations and low consumer acceptance can be major obstacles for the growth of the automotive blockchain market.
The market for application and solution providers is projected to hold the largest share in the automotive blockchain market
Application and solution providers are the real facets of the automotive blockchain to introduce the technology to the end consumers.The introduction of technologically advanced blockchain solutions has witnessed a certain level of adoption in the automotive applications such as car sharing, ride sharing, electric mobility, automotive title, and the supply chain management, thereby fuelling the overall market growth of the automotive blockchain.
However, the front-end applications are costly and require skilled workforce to create and maintain.With time, the functions/features of these applications/solutions will also increase, in turn, making them even costlier.
The abovementioned reasons would result in applications and solution providers constituting the largest share in the automotive blockchain market.
Smart contracts is projected be the fastest growing application in automotive blockchain market
Smart contracts allow computer programs to execute records and store them on the ledger as a part of the transaction.Smart contracts have a significant number of applications in the automotive industry such as title transfer, dealership management, and B2B contractual agreements.
For instance, the current process of vehicle ownership transfer from buyer to seller involves multiple middlemen, phases, and reconciliations to execute.Blockchain helps streamline this complex process by digitizing titles’ transfer process and reduce the time needed to authenticate and validate the transaction.
According to secondary research and industry experts, more than 42 million used cars were sold in the US last year.With the rise in income levels and changing customer preferences, the market for used cars is increasing in developing countries like India and China.
Hence, it would increase the market adoption of blockchain-based smart contracts.
Asia Oceania: The fastest growing region in the automotive blockchain market
Asia Oceania is projected to be fastest growing region in the automotive blockchain market.The major factors driving the growth of the Asia Oceania market include fast-developing countries such as China and India and increasing expenditure on development of advanced technologies.
For instance, IBM partnered with India-based multinational Mahindra Group for the development of a blockchain solution aimed at the supply chain. In 2015, Chinese conglomerate Wanxiang Group, one of the largest auto parts manufacturers, invested USD 50.0 million in blockchain technology. In July 2018, Tech Mahindra set up a blockchain center within its R&D arm ‘Makers Lab’ at its Hyderabad (India) facility to assist co-innovation in the space by developing enterprise-grade solutions for customers across industries globally. Additionally, the growing Asia Oceania automotive industry calls for an immutable database to record the multiple transactions between automotive ecosystems with shared, secured, and highly permissioned access. Hence, automotive blockchain market in Asia Oceania is expected to witness considerable growth during the forecast period. However, because of the slow pace of technological adoption in the region, the growth of the automotive blockchain market in this region is expected to be slow till 2024–2025.