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The global automotive blockchain market size was USD 0.35 billion in 2020. The market is projected to grow from USD 0.37 billion in 2021 to USD 2.84 billion by 2028 at a CAGR of 33.8% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of 2.7% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The automotive blockchain-based solution executes monetary transactions and agreements and records to enable automobile owners to monetize trips. This blockchain-based automotive solution would interconnect the end-users, car-sharing providers, and smart and autonomous vehicles reliably and securely. The need for faster business transactions, better quality control, and an increasing focus on reducing the manipulation of data have triggered the adoption of blockchain in the automotive industry.
As venture capital (VC) funding continues to upsurge, new technology providers are anticipated to enter the market, providing new service models. The market is estimated to see the emergence of a new breed of programmable blockchain technology platforms. Initial coin offering (ICO), crypto-currency, and Blockchain-as-a-Service (BaaS) are expected to propel the growth of the market during the forecast period, thereby creating immutability and transparency in the distributed ledger technology and simplifying business processes with benefits such as reduced total cost of ownership and faster transactions.
COVID-19 Pandemic Slightly Impacted the Automotive Blockchain Market
In 2020, the coronavirus crisis had a negative impact on the worldwide integrated automotive industries. Many service-based and automotive technology companies faced a slowdown in income as there was a sharp drop in both sales and production of vehicles. However, the market is expected to return to normalcy. Therefore, it is expected that the market will experience positive growth from 2021 to 2028.
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Vehicle Manufacturing to be the Largest Adopter of Blockchain Technology
Automotive blockchain solutions help the original equipment manufacturers (OEMs) to have a follow-up on auto parts and components, about their current modification, and original manufacturer. These solutions help in targeted vehicle recall at any time or when there is a requirement for an upgrade as OEMs have information regarding auto parts and components installed in vehicles sold to clients.
In the vehicle manufacturing process, blockchain technology solutions help in storing work-in-process data, quality inspection data, vehicle data for every automobile on the assembly line, and others. With the growing trend for autonomy and connected vehicles, automobiles are prone to cyber-attacks. The robust cryptographic structure of blockchain is impossible to reverse engineer and offers a secure and safe place to store data. The high level of encryption in blockchain offers maximum security to vehicle telematics data. The above-mentioned factors play an important role in driving the global market.
Reduced Operational Cost Expected to Drive the Automotive Blockchain Market Growth
Blockchain technology in the automotive industry is used to keep data associated with automobiles, including sales, warranty and insurance claims, and other operational costs. Previously, the record-keeping process was done through third parties or the dedicated person storing information of all the processes. But with the introduction of blockchain solutions, such records and data are maintained by means of software that is developed and designed, thereby reducing the cost of compensating salary and other similar expenses paid to the third party. Therefore, the introduction of blockchain solutions in the automobile sector decreases the operational cost, which in the long run drives this market over the forecast period.
Uncertainty over Regulations Hurdle for the Industry
Blockchain technology is still in an emerging stage in the automotive industry, and the governing entities across the world have always found it challenging to manage these advancements. As this technology is decentralized, no single government or company or individual can control the blockchain, thus subjecting it to regulations. For instance, in May 2018, the European Union (EU) applied the General Data Protection Regulation (GDPR) in all member European states. This regulation permits data privacy and European Union citizens to have the “right to be forgotten.” This challenges the decentralized and immutability nature of this technology. Hence, ambiguity over regulations is the restraining factor that hampers the market growth.
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Supply Chain Segment to Dominate Owing to the Increasing Vehicle Production and Sales
Based on application, the market is segmented into smart contracts, supply chain, financing, mobility solutions, and others. Blockchain technology provides several advantages to the automotive sector by increasing the efficiency of the supply chain and decreasing unnecessary costs. The supply chain segment held a major share in 2020. This is due to increasing vehicle sales and production of electric vehicles, which are expected to boost the supply chain segment across the world. Moreover, the smart contracts segment is projected to be the fastest-growing market from 2021 to 2028. The fastest growth of the smart contracts segment is primarily attributed to its applications in the automotive industry, including B2B contractual agreements, dealership management, and title transfer.
Application & Solution to Register the Fastest Growth Due to Increased Demand
Based on provider, the market is segmented into application & solution, infrastructure & protocols, and middleware. The application and solution segment held a major share in 2020, and is anticipated to register the highest CAGR of over 34.6% during the forecast period. The growth is attributed to investments by Tier-I companies and OEMs and the introduction of technologically advanced blockchain solutions. Moreover, application & solution necessitates higher costs to maintain and develop than middleware. Hence, the revenue generated by the application & solution providers is higher.
Personal Mobility Segment to Hold the Largest Automotive Blockchain Market Share Due to Increased Growing Purchasing Power
Based on mobility type, the market is segmented into personal mobility, shared mobility, and commercial mobility. In 2020, the personal mobility segment held the highest share of the global market. The growth of the personal mobility segment can be attributed to the growing purchasing power, rapid urbanization, increasing population, and strong economic growth that are directly contributing to the market growth. Likewise, the commercial mobility segment is estimated to be the highest growing market from 2021 to 2028.
North America Automotive Blockchain Market Size, 2020 (USD billion)
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North America dominated the market in 2020 and accounted for a revenue share of more than 44%. The growth is anticipated to be driven by significant investments by technology providers in the blockchain platform and the growing demand for immutability and transparency in business operations. Moreover, North American is expected to be one of the early adopters of blockchain technology for automotive applications and is projected to be the major contributor to this market in the coming years. Further, the key market players, such as Microsoft, AWS, and IBM, which have their operating base in North America, are projected to accelerate the market growth in the region.
Asia Pacific is projected to emerge as one of the most profitable regions in terms of revenue from 2021 to 2028. This upsurge is attributed to the increasing use of this technology in ridesharing applications in India and China. Further, rising electric vehicle (EV) manufacturing and sales are expected to surge the demand for automotive blockchain in Europe.
The major players in this market include BigchainDB GmbH, Microsoft Corporation, IBM Corporation, Tech Mahindra Limited, ShiftMobility Inc., Accenture, RSK Labs, and GEM. These players continuously focus on partnerships, acquisitions, new product development and launches, and expansions strategy to strengthen their position in the market. The market is witnessing a lot of partnerships between major innovative startups, tech companies, and OEMs for the development of blockchain infrastructure.
An Infographic Representation of Automotive Blockchain Market
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The report provides a detailed analysis of the market and focuses on key aspects such as leading companies, applications, and mobility types. The report covers market statistics from 2017 to 2028. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the factors above, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD billion)
By Mobility Type
Fortune Business Insights says that the global market size was USD 0.35 billion in 2020 and is expected to reach USD 2.84 billion by 2028.
In 2020, the North America market value stood at USD 0.16 billion.
The market is projected to grow at a CAGR of 33.8% and will exhibit steady growth over the forecast period (2021-2028).
The supply chain segment is expected to be the leading segment in this market during the forecast period.
The need for faster business transactions, better quality control, and increasing focus on reducing manipulation of data to propel the market growth.
North America dominated the market share in 2020.
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