A new report predicts that the use of blockchain technology in the automotive sector will skyrocket, driven by the need for major industry players to improve safety and efficiency.
The study, compiled by Report Prime, claims that the blockchain market share in the sector is expected to grow from $82.50 million in 2023 to $160.78 million in 2030. Compared to its current levels, this jump puts the compound annual growth rate (CAGR) at 10%, with several factors integral to the anticipated growth spurt.
According to the report, the rise of electric vehicles and connected vehicle technologies are the main factors responsible for the increase in blockchain applications between 2022 and 2024. Future drivers of adoption will revolve around the need for automakers to protect consumer data from bad actors.
Blockchain can also be used to streamline supply chain management, allowing manufacturers and consumers to track the movement of vehicle parts and their history. Experts say the real-time tracking capabilities provided by distributed ledgers will be key to curbing the proliferation of counterfeit parts while reducing fraud.
By segment, publicly distributed ledgers will battle with enterprise solutions for dominance, with companies weighing the tradeoffs before opting for their preferences. Companies seeking greater control over data to protect proprietary systems are more likely to opt for private blockchains, while public blockchains will offer enterprises the highest levels of transparency.
In terms of applications, the key drivers by 2031 will be vehicle safety and data security, while supply chain use cases will come in second. Applications in the manufacturing sector will steadily increase as innovation reaches new heights, with use cases in the segment orbiting around certification and production status tracking.
According to a regional analysis, North America, led by the United States and Canada, is expected to outpace its peers, thanks to significant investments in research and development. The report says North America’s cultural acceptance of technology gives it an edge over other regions, with Europe and Asia Pacific eager to catch up.
“The Asia-Pacific region, particularly China and India, is the fastest growing region, driven by increasing urbanization, demand for smart vehicles and government support for blockchain initiatives,” the report reads.
Fight between giants and disruptors
The report highlights a power struggle between established technology companies and innovators for blockchain market share in the region. In the first few years studied, giants like IBM (NASDAQ: IBM) and Microsoft (NASDAQ: MSFT) are expected to hold a significant lead in the sector with their open source and Azure Blockchain services, respectively.
However, SHIFTMobility and carVertical are gaining traction in the sector with their innovative approach to vehicle tracking and mobility. The report states that as more companies enter the sector, the market size of tech giants in this space is expected to be impacted by innovative disruptors.
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