In October 2021, Facebook announced it would change its name to Meta
And seemingly overnight, the idea of a Web3 revolution based on virtual-reality technology, blockchain and nonfungible tokens — also known as the metaverse — became buzzworthy.
Yet the metaverse goes back 30 years, when the author Neal Stephenson coined the term in his science-fiction novel “Snow Crash.” And indeed, the concept of a virtual world almost parallel to our physical dimension sounds like science fiction. But the metaverse is here to stay and will impact every aspect of our lives, including transportation and auto makers.
The metaverse is essentially a shared online space allowing users to create their own avatar and interact in a digital environment, built by virtue of technological innovations like blockchain, virtual and augmented reality as well as artificial intelligence. Its presently imagined purposes include virtual work meetings, virtual events like concerts and conferences, and virtual retailers — but it is much more than a virtual play world.
We’ve only just begun investigating what the metaverse can offer, yet several car manufacturers have already jumped on the chance to contribute to this revolution. I believe their efforts will reap substantial benefits as consumers get more acquainted with the future-turned-present.
In this virtual reality world built on blockchain technology, each vehicle – real and virtual — and every one of its components would exist as an NFT, verified by the automaker and stored on the public ledger for everyone to see. This will facilitate an automaker economy where secondary sales could last a lifetime.
AR and VR will impact the industry in many ways including:
- Development and testing: Automakers can test every step of the vehicle development process in the metaverse, significantly reducing cost and risk, and relaunch concept cars that never came to fruition. Engineers would be able to respond in real time with changes to everything from the structural body to aesthetics and ergonomics.
- Problem diagnosis and feedback: With the enormous amount of transactions happening in the metaverse, auto makers can receive customer feedback and send it to factories and dealerships. Above all, they could see how customers respond to still-to-be-released vehicles. They could also run remote diagnostics on physical cars as well as on virtual ones and, once again, improve on efficiency while cutting costs.
- Customization: Cars will be made up of potentially thousands of parts, all representing a single NFT. Customers could begin to build a car in a virtual world almost like building blocks, going beyond customizing paint and sear coverings. They’ll be able to add the layers to the vehicle via a software-based car configurator, but not the actual production-line build.
- Gamification: Automakers would have an easy time gamifying end-to-end retail-to-race experiences, in which users build a vehicle in a car configurator and then take it to the track. They would sell entire cars or car parts that customers can build in the metaverse and use to globally compete with other players.
- Dealership and delivery: With a customer’s test drive effectively happening from the comfort of their own home, auto makers can use the metaverse as a first-mover-opportunity. The car could be sold in the metaverse and then physically delivered to a customer’s driveway.
- Compliance and innovation: By entering the metaverse on a public blockchain and using the ID layer to verify people and assets within a trusted ecosystem, the gap between web2 (the current internet) and Web3 (blockchain based and decentralized) that has traditionally held back the world’s biggest companies from using blockchain can be bridged.
Basically, web2 is surfing on the web. It uses centralized systems like a top-level domain that is controlled by a company. There is no privacy because to use the products, your data is extracted and sold. Web3 is surfing inside the web. You have nodes that are operated by thousands of people, so it’s more secure and less centralized. Your data is yours. Your privacy is yours due to innovations like Zero Knowledge Proof.
It’s all slightly surreal but exciting. And none of it can be reduced to simply playing with cars in a play world. So as gimmicky as it might have first sounded, at least to skeptics, there’s no better time than the present for auto makers to join the ride.
Lone Fønss Schrøder is the CEO of Concordium, a blockchain company, and vice chair of Volvo Cars.