Putting The Pedal to the Metal on NFTs

The automotive industry has been very active in the NFT space, especially since the start of last year. Some of the companies that have announced new initiatives or taken steps to enter the world of NFTs since the beginning of 2023 include DeLorean, Hyundai, Lamborghini, Renault, Rolls Royce, and Škoda India.

Most of the ventures have one of the following as primary objectives:

  • Collectibility. This was initially the most common goal for car-branded NFT collections and is still important. Many companies are offering collections of NFTs designed by one or more digital artists, usually featuring renditions of notable car models, both vintage and new. Although there are exceptions, auction prices can run in the thousands, with some generating high prices in the hundreds of thousands, and immediate sell-outs have been the norm. McLaren offered 22 separate CAD components of its MCL35M 2021 race car; fans who purchased them all could build a full interactive, three-dimensional, digital vehicle. Lamborghini’s collection of 20 3D-animated NFTs of different car models came with a 1:18 scale physical model signed by Lamborghini’s CEO and Chairman. And Renault brought licensed products into the mix, offering NFTs twinned to 960 pairs of physical limited-edition sneakers. The shoes also have an NFC chip giving access to another NFT, which serves as a certificate of authenticity and contains information about the design and production history of the shoes.
  • Exclusivity and fan engagement. This is one of the top goals for NFTs in the car industry, along with and probably even exceeding collectibility. Ferrari is developing an NFT marketplace where holders can engage with the brand and the fan community, receive rewards, and access other value-added opportunities. Lamborghini recently ended an eight-month NFT campaign that included collectibles and rewards, as well as an “ask-me-anything” session with senior executives to discuss the brand, its future, and its history. Hyundai’s collaboration with NFT collection Meta Kongz was linked to a “Metamobility” universe, among other components. And French brand Alpine has a partnership with Animoca Brands whereby fans can race realistic digital Alpine models in a game called REVV Racing, competing against cars with different performance characteristics, with winners earning REVV tokens with significant value.
  • Authenticity and other utility linked to physical vehicles. While this use is still emerging, many observers believe NFTs that serve as a secure repository for recordkeeping, in conjunction with physical cars, will ultimately be the one of the most important ways brands use NFTs in this industry. Alpha Romeo is implementing NFTs tied to a new SUV model, the Tonale, allowing vehicle maintenance records and other vehicle data to be recorded. Initiatives like this could also be used to store driver details, environmental factors, driving styles, and road conditions experienced by the vehicle, as well as ownership details—all information that could impact the value of the car. Nissan Canada offered an NFT of a GT-R model, with artwork created by Alex McLeod, auctioned with a reserve price of $200,000; a real-world Nissan GT-R was included in the price, with the twinned NFT serving as a certificate of ownership. DeLorean is using NFTs as a means for customers to reserve one of its upcoming Alpha5 electric vehicles; the NFT is linked to a production slot and also offers engagement activities such as exclusive events and an avatar.
  • Charity. A few brands are using their NFTs for charitable purposes. Rolls Royce launched a series of collectible NFTs tied to six new Phantom Series models. The royalties generated through primary and secondary sales of the NFTs were collected for charity, with proceeds of more than $1 million by December 2022 exceeding expectations. Meanwhile, Porsche’s Deutschland and Australia divisions launched NFTs in their respective markets, one a sketch in physical and digital forms by designer Peter Varga and the other a work by artist Nigel Sense. Proceeds were donated to the non-profit groups Viva Con Agua and the Australian Center for Contemporary Art.

Other brands that have entered the NFT market include Aston Martin, Audi, Bentley, General Motors, MG, Mitsubishi, Volkswagen, and more.

It should be noted that most NFT initiatives in this industry not only meet one or more of the objectives listed above, but they also serve as a marketing tool for the brand. Of course it is essential that consumers feel the NFT initiative fits with the brand’s values and image; Porsche stumbled in this area when it released a collection based on its 911 model that was considered rushed and low quality, especially given the high floor price. It addressed those complaints in subsequent releases.

Many of the objectives discussed here are not unique to car brands, of course; they are essentially the same as for NFT initiatives in any other sector of licensing. But the car industry seems well positioned to succeed in the NFT space for a number of reasons. It has a very strong collector community focused on the cars themselves, as well as licensed products, vintage merchandise, and more. There is a need for proof of authenticity, as cars have a high purchase price, are often bought and sold, and tend to attract some dishonest operators. The industry has a reputation for innovation and design, which NFTs can reinforce. Brands have a long history that is of strong interest to fans and provides lots of vintage and new content for unique digital art. And there is a large luxury component whose members crave exclusive perks, to which NFTs can provide access.

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