The automotive market of the future will be starkly different from that of today. It will need to be more integrated and offer on-demand and personalised services that will include autonomous, shared and connected cars. Blockchain has the potential to play a major role in underpinning the industry transformation that is coming. We expect that interest will grow over the next two to three years as more businesses explore blockchain opportunities, which will develop into detailed enterprise strategies.
The rationale and value of investing in blockchain will depend on a company’s overarching strategic objectives as well as its capacity and capabilities. However, enterprises who do not consider the impact are at risk of falling behind. Those who are more proactive will have the ability to take earlier advantage in generating value for their business. With an analysis on the value and practical applications of blockchain in the automobile industry, this report explores the blockchain opportunities, and helps shape the understanding so businesses can develop the most appropriate approach.
Viewpoints / key findings
•Understanding of blockchain. The level of knowledge among the majority of executives relates to the concept and benefits at a broad level, rather than specific and detailed understanding of which applications would be most relevant and valuable to their business.
•Blockchain opportunities across the value chain. The rationale for blockchain across the automotive industry is considerable. Opportunities exist across the industry, including for Original Equipment Manufacturers (OEMs), suppliers, dealers, financers and end-consumers among others. Thinking about the business operating model, blockchain can be applied in different ways, which can be used to make existing processes more efficient, support the move into adjacent services and markets, and help the development of new transformative services. While blockchain can be used in isolation, it is likely to have a bigger impact when combined with other technologies such as big data, Internet of Things and Artificial Intelligence.
•Practical applications of blockchain. From an initial analysis of over 40 use cases which were short-listed and combined by ‘use case purpose’, we developed three case groups to cover the breadth of the automotive market and blockchain application.
The World of Ride Sharing
According to an ARK Invest white paper analyzing Mobility-as-a-Service, superior economics and increased convenience will encourage adoption of autonomous cars by as early as 2019. As a result, autonomous taxis will accommodate a ten-fold increase in vehicle utilization rates, radically reducing the price of point-to-point travel and spurring a fundamental shift in consumer behavior. It is fundamentally believed that the taxi will grow to dominate personal mobility, disrupting the auto industry dramatically and transforming the economy yet again, but it is the consumers that stand to be the greatest beneficiaries of this transformation.
While fully autonomous taxis may be a several years away, mobile taxi hailing applications such as Uber and Lyft have already changed the ecosystem. Convenience, ubiquity and the economics of mobile taxis are creating true alternatives to car ownership.
The statistics tell us that ridesharing services could have caused a cumulative loss of 640,000 car sales globally through 2015 and may have caused another 1.9 million in forgone sales units in 2016, with Asian markets including China, India and Southeast Asia experiencing faster adoption of ridesharing services than more developed markets because of the infrastructure obstacles to driving and parking cars in crowded urban centers.