Automotive Blockchain Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Automotive Blockchain market is valued at USD 0.3 billion in 2020 and is expected to reach USD 2 Billion exhibiting a growth rate of 27.12% during the forecast period 2021-2026

The COVID-19 pandemic had a negative impact on the globally integrated automotive industry. Many automotive technology and service-based companies faced a severe decline in revenue as there was a sharp decline in both production and sales of vehicles. As the situation is coming back to normalcy, it is expected that the market experiences positive growth in the coming years.

Owing to the growth in investments in autonomous and connected vehicles and various types of mobility services, such as vehicle rental, leasing, hailing, sharing, pooling, etc., the automotive blockchain market will see growth during the forecast period. Blockchain would allow car rental companies to manage their fleet by monitoring the maintenance, cleaning, etc. of registered vehicles.

Blockchain technology is also finding application in car manufacturing by enhancing supply chain management. Blockchain technology helps in keeping the complete record and information of the parts and components, which eventually helps the OEMs during vehicle recall and service. This also helps in identifying counterfeit products thus, ensuring the customers gets high-quality products and service.

With the rise in vehicle accidents, primarily in countries such as India, blockchain technology could help in eliminating redundant steps that a customer goes through while claiming insurance. Blockchain technology will see growth owing to the increasing demand for smart finance solutions.

Blockchain offers a lot of benefits to the automotive industry by increasing the efficiency of supply chain and reducing unnecessary costs. However, building a blockchain infrastructure follows a complex development process and requires heavy investment. Nearly 95% of OEMs are willing to do moderate to significant investments and most consider not to invest only for the basic offerings of blockchain technology.

Key Market Trends

The vehicle manufacturing will see the largest use of blockchain technology

The automotive parts and components are susceptible to damage, stealing, lost in delivery, etc. and the manufacturer may not be knowing about this or could not take necessary measures to prevent it even after knowing about the component. Blockchain helps the OEMs to have a follow up on these components, about their original manufacturer, and current modification. This helps in targeted recall of vehicles whenever there is a need for an upgrade as OEMs have information regarding what components and parts are installed in what vehicles, sold to which customer.

In the manufacturing process, blockchain technology helps in storing the vehicle lading data, quality inspection data, work in process data for each and every vehicle on the assembly line, etc. With the rising trend for connected vehicles and autonomy, vehicles are becoming prone to cyber-attacks. The strong cryptographic structure of blockchain is impossible to reverse engineer and provides a safe place to store data. The high level of encryption in blockchain provides maximum security to vehicle telematics data.

Blockchain enables safe and transparent storage of sensor data from a vehicle in a decentralized network. This helps in error free documentation of data during the instances of accidents that makes insurance claiming hassle free. Blockchain can allow the sharing of insurance profile while using other vehicle services such as car sharing.

Asia Pacific to register the highest growth rate

Asia Pacific countries such as India and China are home to some of the biggest IT companies in the world and both are major automotive markets in the world. China is the largest manufacturer of vehicles and a major producer and exporter of automotive components. Automotive blockchain will see collaboration between OEMs and Technology companies in the region during the forecast period. In September 2019, Indian automotive manufacturer Tata Motors announced “Tata Motors AutoMobility Collaboration Network 2.0” for startups by which it wants to produce industry-related products that include Blockchain and Artificial Intelligence Solutions.

In China, blockchain technology is finding applications in the used car industry which is a booming market in the country. Several companies in the automotive industry are partnering with blockchain technology offering companies. For instance,

• In April 2021, the China Association of Automobile Manufacturers (CAAM) has launched an auto data storage platform, using blockchain technology, for smart cars.
• In February 2021, A joint venture agreement has been signed between the Concordium Foundation (Concordium) and the Geely Holding Group (Geely). Concordium's Blockchain Technology will be used by the joint venture to establish itself as a top Blockchain Technology and Service Provider in China. The joint venture will enable Geely and Concordium to provide novel blockchain platform-based business models and user DApps for all industries, including the automotive sector, to enterprises and customers.

Competitive Landscape

The market for Automotive Blockchain is a fairly consolidated one with key players such as Microsoft, BigchainDB, GEM, IBM, SHIFTMobility dominating the market. The market is witnessing a lot of collaboration between major OEMs, tech companies, and innovative startups for the development of blockchain infrastructure. For instance,

• In May 2020, General Motors, Ford, BMW, Renault, and ZF have partnered up, alongside leading technology companies Accenture, IBM, and Bosch, amongst others, to begin testing how blockchain can be used to improve transportation and mobility. The initiative named the Mobility Open Blockchain Initiative (MOBI) will look to implement blockchain technology in a range of use cases across the automotive industry, including autonomous driving, supply chain, and vehicle identity tracking, vehicle payments, and ride-sharing solutions.

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