Lux car brands switch up gears on the blockchain

When luxury stalwart Porsche made its foray into non-fungible tokens (NFTs) last year, the backlash that followed was a wake-up call for the automotive industry. A brand feted for its high-performance vehicles, Porsche’s misfire – said to be spurred by the project’s unreasonably high prices and poor communication – proved that even the most solid of reputations in the physical realm could crash in the digital one. “They relied too much on the brand,” Katerina Ali, founder and CEO of digital loyalty program facilitator Immersifi tells Jing Daily. Porsche’s blunder was perhaps a blessing in disguise. Off the back of the widely documented mishap, brands have been revising their NFT roadmaps to maximize value and customer satisfaction. Automobiles and NFTs are an arena that remains considerably untapped. However, it is a market poised for promising growth. According to Allied Market Research, the automotive blockchain sector is expected to top $5.61 billion by 2030, with advancements in blockchain technology, increased investment, government support, and startup innovation propelling its expansion. Collectors editions Collector culture is significantly helping drive NFT adoption forward, with brands using the allure of physical rarities to onboard car hobbyists onto the blockchain. Bugatti’s activation is an example of an NFT-infused collectible done right. Last year, the high-performance manufacturer teamed up with British brand Asprey’s Web3-arm, Asprey Studio, on an uber-exclusive drop of 111 objet eggs, each made with 1,500 pavé diamonds and carbon fiber. Minted on the Bitcoin blockchain, the eggs were priced between $20,000 to $50,000. Alongside the egg and accompanying NFT, owners were also gifted an Asprey gold signet ring as an esteemed badge of honor. “We chose the ring to make our audience feel like part of the club. This isn’t just for flippers, it's for people who love collecting,” Ali Walker, Chief Creative Officer at Asprey Studio told Jing Daily last year. The project was designed with both seasoned automobile collectors and Bugatti’s active fanbase in mind, says Walker. It also opened up new revenue streams for the brand. Prior to the objet egg drop, Bugatti and Asprey initially released 261 sterling silver sculptures of Bugatti's Voiture Noire in 2022, which sold out instantly. A larger, one-of-one sculpture was later sold at a live auction, hosted by Phillips Auction House, for 378,000 British pounds (approx $488,304). While Bugatti set the standard in terms of prestige and exclusivity, non-premium brands have also found success via more accessible NFT-powered artifacts. Renault, for instance, released 960 pairs of exclusively designed NFT-connected sneakers under its ‘R3nlt’ Web3 division in May 2023. Inspired by the brand’s flagship R5 turbo model, the sneakers were available to purchase for 265 euros (approx $288.52). As the collectibles market heats up, Immersifi’s Ali cautions that, while NFT scrutiny may have mellowed slightly, expectations are higher than ever (as witnessed with Porsche’s token misstep). “We’ve gone past the age of just collecting. The attention span is shortening and next generations want more value,” she says. “It’s not just about a great brand; today, it's about what’s in it for me.” Experiential value While NFT drops fail to make as much noise as they once did, the downturn in hype hasn’t deterred major players like Mercedes-Benz, which are steering ahead with their activations. The company’s Web3-arm, coined NXT, has been consistently releasing token-powered drops since its inception in May last year. Experiential value plays a key role in Mercedes-Benz’s NFT initiative. Last month, the brand dished out digital car passports to attendees of its 24-hour Nürburgring race event. Via QR codes, guests could access detailed insights on the different models, including the Mercedes-Benz Classic, Mercedes-AMG, and Mercedes-AMG Motorsport vehicles, all stored on the private Aura Blockchain Consortium. Fans could also collect several unique wallet card mementos as keepsakes from the event. Marketing strategist and board member of the Metaverse Fashion Council, Sara Noggler, believes that supplying audiences with POAPs (proof of attendance protocols, or digital souvenirs), can open up direct communication lines for long-term engagement. “For instance, holding a particular car brand’s digital collectible could grant access to VIP car events, advanced bookings for new models, or exclusive merchandise,” Noggler adds. Honoring heritage Classic car manufacturers are also turning to the blockchain as a way of preserving their heritage. Lamborghini has been deploying NFTs to not only engage the next generation of car enthusiasts, but retell its brand story through a medium that aligns with their digital-native behaviors. British manufacturer Rolls-Royce has also tapped the blockchain to maintain its cultural relevance. The brand dropped a series of NFTs dedicated to its iconic Phantom model early last year in collaboration with artist Sacha Jafri. The project’s proceeds, which surpassed its original target of $1 million, were later donated to charity. But beyond community-building and experiential perks, can NFTs offer more practical use-cases? Ali notes that, as consumers become more discerning, brands can employ digital tokens to help modernize their playbooks and solve existing pain points. “Do away with log books and have the car’s history stored on the NFT,” Ali adds. “The blockchain does not allow for change, so dialing back speedometers, or saying you had it regularly serviced cannot exist anymore.” Strategist Noggler concurs, emphasizing that legacy brands should approach the blockchain as an archive. “Tokens could include detailed histories of the vehicle, such as maintenance records, previous ownership, and unique features,” she says. Companies are listening to consumer demand. Alfa Romeo’s Tonale models now arrive with their own digital certificate that provides records of the vehicle’s lifespan, including purchase and major maintenance details. While NFTs have made strides since their initial development phase, Ali notes that the technology is still nascent and requires a lot of trial and error. To achieve a well-executed activation, brands need to find that sweet spot of merging their heritage, brand identity, quality, and experience. They also need to be willing to take calculated risks to move the needle forward, even if it fails to land like Porsche. “Some projects have worked better than others,” Ali adds, “but that's all part of new technology.”

Lux car brands switch up gears on the blockchain

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Published July 20, 2024

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Lux car brands switch up gears on the blockchain