A new report predicts the rapid rise in the use of blockchain technology in the automotive sector, driven by the need of key industry players to achieve improved safety and efficiency.
The study, compiled by Report Prime, claims that blockchain’s market share in the industry is expected to grow from $82.50 million in 2023 to $160.78 million in 2030. From current levels, the compound annual growth rate (CAGR) at 10%, with several factors integral to the predicted growth spurt.
According to the report, the rise of electric vehicles and connected vehicle technologies are key factors responsible for the spike in blockchain applications between 2022 and 2024. Future drivers for adoption will revolve around the need for automakers to protect consumer data from bad actors.
Another use case for blockchain is its application in streamlining supply chain management, allowing manufacturers and consumers to track the movement of vehicle parts and their history. Experts say the real-time tracking functionalities of distributed ledgers will be critical in suppressing the spread of fake parts and reducing fraud.
By segment, publicly distributed ledgers will compete with corporate solutions for dominance, with companies weighing the tradeoffs before choosing their preferences. Companies looking for greater control over data to protect proprietary systems are more likely to opt for private blockchains, while public blockchains will provide companies with the highest levels of transparency.
In terms of applications, the biggest drivers in 2031 will be vehicle safety and data security, while supply chain use cases will come in second. Applications in manufacturing will steadily increase as innovation reaches new levels, with use cases in the segment revolving around certification and production status tracking.
According to regional analysis, North America, led by the US and Canada, will gain an edge over its peers, supported by significant investments in research and development. The report claims that cultural acceptance of the technology in North America gives it an edge over other regions, with Europe and the Asia-Pacific region keen to close the gap.
“The Asia-Pacific region, particularly China and India, is the fastest growing area, driven by increasing urbanization, demand for smart vehicles and government support for blockchain initiatives,” the report said.
Battle between giants and disruptors
The report highlights a brewing battle between established technology companies and innovators for blockchain market share in the region. Giants like IBM (NASDAQ: IBM) and Microsoft (NASDAQ: MSFT) are expected to have a significant lead in the industry in the coming years with their open-source and Azure Blockchain Services, respectively.
However, SHIFTMobility and carVertical are gaining popularity in the industry due to their innovative vehicle tracking and mobility approaches. The report claims that as more companies enter the space, the market size of tech giants in the space is expected to take a hit from innovative disruptors.