Automakers are minting NFTs

Big car manufacturers like Lamborghini and Ferrari are tapping into the NFT space. However, both in very different ways. Ferrari is exploring the possibilities the metaverse and NFTs have to offer. On the other hand, Lamborghini issued DMCA shutdown notices to NFTs and NFT collections featuring the company’s models.?

Digital ownership is taking over the web, and as the world continues to make large strides toward integrating society with technology, blockchain could be how we take value from the physical world into the metaverse.

Automobile manufacturers are increasingly entering the NFT space, which is?projected?to grow to $240 billion by the end of the decade, minting unique collectible digital tokens that are sometimes bundled with car purchases.?

In December last year, MG Motors India?announced?1,111 tokens as part of its launch collection, introducing its first NFT on its own purpose-built platform, KoineArth’s NgageN. Earlier in June, sports car manufacturer McLaren?announced?its goal to mint virtual versions of its F1 cars as NFTs.

Last month, Mercedes-Benz?commissioned works from five NFT artists?— Charlotte Taylor, Anthony Authié, Roger Kilimanjaro, Baugasm, and Antoni Tudisco — to produce a collection inspired by its G-Class line of vehicles. Mercedes, which has been particularly proactive in adopting the emerging technology, has also?partnered?with blockchain startup Circulor in an attempt to track its supply chain’s cobalt emissions.

Premium Italian car brand Lamborghini is also?releasing?its first NFT collection that’s only accessible using a “Space Key.” These rare Space Keys are carbon-fiber composites sent by Lamborghini to the International Space Station in 2019 for research purposes and will give holders access to five limited-edition pieces of art.

Driving the trend

Some believe NFT sales could become much more widespread in the automobile industry, while others remain skeptical. The fundamental argument is the same as regular NFTs:?Do they actually provide any value?

The GameFi sector has been pushing NFTs harder than any other blockchain-based projects, with in-game assets like rare cars emerging as a sub-trend. Proponents claim this is akin to buying a microtransaction skin in an online game but fail to mention the differing incentives. Games such as Axie Infinity have expensive barriers to entry and are played with the intention of making money — not just having a fun evening.

?“The utility for high-end luxury cars will evolve to enable scarcity through rarity traits attached to the NFT, reflecting the physical attributes of the car. When it comes to high-end cars, each is uniquely different, yet today, these details are not reflected in the pink slip.”

Regardless, the topic at hand has yet to evolve into its final state. The blockchain industry as a whole is still relatively nascent, and NFTs, further so, are a niche sub-industry within it. The metaverse is only in the conceptual stages, and while many are quick to pin it together with Web3, it’s still too early to know how either of them will pan out.

Web3 promises to make owners out of end-users, giving people control of the data they produce, as well as a means to monetize it. However, for this to become practical, businesses will need to significantly alter their models to ensure long-term sustainability. As the adoption of NFTs grows and companies continue to develop their models to accommodate them, the production of automobile NFTs will likely find itself on a rising growth trajectory in the years to come.

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