Web3 and blockchain are becoming an increasingly ‘hot’ topic in most industries, including automotive. We interviewed automotive experts specializing in the internet of the future, Antoine Weill and Patrick Valentin, to find out exactly how Web3, blockchain, and the metaverse are affecting the industry, as well as how manufacturers should prepare.
Web3 and the metaverse will continue to gain traction in coming years, posing a huge opportunity for players in the automotive industry. This is why we conducted our Web3 consumer study, which surveyed over 1,000 consumers in Germany and the US earlier this year.
The study made the generational gap in these areas clear and highlighted where value can be gained from Web3 and the metaverse. To find out more, we reached out to the authors of the study and experts in the field, Antoine Weill and Patrick Valentin.
Antoine, Patrick, thanks for joining us today. First, could you tell us if there was anything specific that sparked the creation of the automotive study on Web3 and blockchain?
Antoine: Both consumer and business interest in Web3 and metaverse are continuously growing, gaining significant traction in 2021. The technology is starting to mature and use cases are being produced across industries.
The trajectory reminds us of digitalization when it emerged as a mainstream business topic. Despite this development, monetization opportunities have barely been tapped into and there are few efforts to actively quantify use cases that customers value.
Additionally, the automotive industry is currently exploring a range of different use cases, and even if Web3 hasn’t yet reached adoption in automotive similar to that of gaming, many industry leaders see clear potential and concrete applications becoming relevant in the near future.
Were there any results from the study that surprised you or that you found particularly interesting?
Antoine: The awareness of Web3 did surprise us, with 40 percent of respondents being concretely aware of the term “Web3”. We would’ve expected high awareness from terms such as “blockchain” and “metaverse” – given the mainstream media attention –but were glad to see that even “Web3” is a familiar concept to a significant portion of consumers.
We were also interested in the differences in preferred Web3 use cases between generations. Older generations see Web3 applications as a means to improve the existing world (i.e., use cases related to improvement of the physical vehicle), while younger generations can easily imagine new opportunities in a virtual world (i.e., use cases around virtual reality (VR), augmented reality (AR), and tokenization).
Antoine and Patrick, you believe Web3 and blockchain will play an important role in the automotive industry, with many quick wins as well as long-term monetization opportunities. What do you see to be the main trends that emerge in the automotive industry, related to the Web3 space?
Patrick: The main trends include the emergence of immersive experiences in open or closed metaverses to target future GenZ and GenAlpha customers. This has reinforced the launch of non-fungible tokens (NFT) as collectibles or sources of funding.
There are also new revenue streams being created, or at least existing ones are being secured. For example, Alfa Romeo will record service history on the blockchain for the launch of their new model Tonale. This will have expected benefits for service loyalty and residual values. Jaguar and Land Rover will equip its models with an in-car crypto wallet to help drivers monetize their data.
Lastly, Web3 offers completely new experiences related to VR or AR. Besides mobile and desktop, cars may likely become a major gateway to the metaverse. Virtual and augmented reality experiences will become more dominant – especially when autonomous driving goes mainstream.
What applications of Web3 in the automotive space do you see adding the greatest value to customers?
Antoine: Virtual sales offer a great option to experience the car in countless configurations (e.g., body color, trim design, interior, etc.) before deciding to purchase the vehicle.
Blockchain technology offers tamper-proof service records and traceability of vehicle parts, particularly valued by consumers above the age of 35. Moreover, NFTs, either linked to a physical good or purely digital, offer a huge opportunity with regards to customer engagement, community building, and online marketing.
Which Web3 application(s) do you think creates the biggest ‘quick wins’ in the near future?
Patrick: I list these in no particular order. First, virtual sales. The launch of virtual showrooms in existing metaverses (e.g., Acura in Decentraland) can be implemented with limited tech and legal infrastructure.
Second, gated communities. Individual metaverses (or early versions of them), gated through NFT access, provide a significant opportunity for OEMs to connect with their customers.
And third, NFT virtual cars and collectibles. The launch of NFTs as collectibles is easy to implement and holds significant potential in terms of awareness and attracting different target groups. To elaborate a little further on this, NFTs enable virtual car models to be used across or within specific metaverses. This is similar to what’s happening in the fashion industry for avatars.
Which Web3 application(s) do you believe has the greatest future potential in terms of adoption and monetization?
Patrick: The metaverse can create a new sales channel, a powerful marketing tool, a tight-knit customer community, and big new revenue streams. All of which offer huge monetization potential for OEMs and other automotive stakeholders.
Direct monetization is offered via ads in the metaverse (personalized and contextual) with opportunities to improve direct marketing and consumer engagement as well as analytics. However, the real game changer may be corporate tokenization. Companies will issue tokens, directly to the financial market and/or to end-customers, to raise capital and create a community where borders between users and stakeholders collide. The main benefits lie in the seamless access to capital and the enhanced loyalty of brand community members.
The automotive industry is generally very open to the idea of Web3. As Web3 and the metaverse are still only just beginning to be adopted, huge monetization potential exists for players in the auto industry across the board. From your experience talking with industry experts, what is the general opinion of Web3 in the automotive industry? Do OEMs, dealerships, parts suppliers, etc., generally understand what Web3 entails?
Patrick: A majority does not, but the number is growing as GenZ enters the automotive labor market. Big players are actively starting to develop use cases and think about what Web3 and metaverse mean for their business – but go-to-market and monetization approaches are different. Companies need to reinvent their approach to go-to-market, like the adage says: “You can't teach an old dog new tricks”.
Are they generally open to it?
Antoine: Yes – especially given the generational preference gaps we saw in the study. Web3 and metaverse may be an attractive way to drive engagement and business among hard-to-reach younger customers, for whom car ownership is currently lower than ever.
Patrick: A variety of use cases have already been pushed out, all of which could be considered early movers. Regarding metaverse presences for example, Acura has created a virtual showroom in Decentraland and BMW has created its own metaverse called Joytopia.
On the topic of NFTs, Nissan has auctioned NFTs to fund charity and Alpine has launched digital concept car collectibles. In addition, Alfa Romeo stores their service records in the blockchain, Jaguar Land Rover is piloting an in-car wallet for data monetization, and Tesla has accepted crypto payment and communication in the past.
However, most initiatives seem opportunistic and developed in isolated islands – players will need to manage new ways of bringing products to market and monetizing them. This requires new capabilities and resources.
For more information on Web3 and metaverse opportunities in the automotive industry read Antoine and Patrick’s previous blog on a summary of the study results our study here.
For more detailed insights, read a full breakdown of our study – Web3: The Age of Decentralized Value in Automotive. For anything else on the topic, feel free to contact Antoine and Patrick!