As 5G and the Internet of Things (IoT) continue their growth, vehicles are becoming more and more connected. And TuSimple is hoping to begin selling completely autonomous Level 4 trucks to fleet operators in 2024. A major barrier to this relentless growth, however, is consumer and regulatory concerns. In addition, more than half of all vehicles are expected to fall into the Level 1-5 range in 2024.
What is the future of the automotive industry?
Automakers reduce reliance on distant suppliers as trade tensions and conflicts expose the fragility of global networks. Also, advanced battery management systems improve safety, extend battery life, and optimize performance. Automakers integrate these systems to offer more reliable vehicles across global markets. In 2024, EV sales reached 17 million units, accounting for over 20% of global new car sales. Also, the EV market is projected to reach USD 6.16 trillion by 2035 at a CAGR of 25.32%. Autonomous driving demonstrates scalable deployment across passenger and freight use cases, and subscription models give consumers flexible access to vehicles.
Launch Mobility streamlines Shared Mobility
For this in-depth research on the Top Auto Trends & Startups, we analyzed a sample of 3836 global startups & scaleups. The car market trends are shifting towards regional suppliers to diversify their supply chains and mitigate risks. OEMs seek alternative sources to improve sourcing flexibility and bring products to market faster. The U.S. and China trade war has also influenced the search for alternative sourcing options.
Its vehicle tracking system provides 24/7 real-time visibility, supported by self-install and engineer-fitted options, with no minimum fleet size required. With the introduction of 5G networks, advanced telematics features like real-time diagnostics, autonomous driving, and improved safety systems are becoming even more feasible. Canadian startup Xaba develops intelligent automation solutions, materials, and processes for sustainable manufacturing. Its AI-driven control systems, xCognition and xTrude, enhance industrial robotics and additive manufacturing by automating programming and improving precision. US-based startup Aviva Links builds in-vehicle connectivity solutions that include multi-gigabit Ethernet and ASA Motion Link (ASA-ML) semiconductor products for ADAS systems.
- This approach offers more convenience and flexibility than traditional car ownership and allows consumers to change vehicles based on their needs.
- These cars offer numerous benefits, not just for drivers and manufacturers, but also for passengers and the environment.
- German startup SafeAD develops a vision-first perception and scene-understanding pipeline for autonomous driving.
- It also works with Ethernet and LIN, enabling integration across passenger cars, buses, trucks, and autonomous vehicles.
- Advances in AI, sensor technology, and connectivity are also playing a key role in improving the safety and adoption of autonomous vehicles.
- By 2025, the sector is expected to experience continued technological advances, heightened sustainability efforts, and shifting market dynamics.
What are the future predictions for automotive industry innovations?
- Auto brands that stay on top of these trends and continue to innovate will be able to build a resilient business, that will help nurture a more electrified, connected, and sustainable future.
- Additionally, it uses the Future Trends Index to identify and prioritize relevant design directions across different markets.
- Chinese startup Move-X Autonomous Driving offers Level 4 autonomous driving through integrated vehicle platforms designed for commercial deployment.
- OEMs seek alternative sources to improve sourcing flexibility and bring products to market faster.
- 5G facilitates faster data transmission, higher network and bandwidth capacity as well as improves security (e.g., protection from cyberattacks).
- The Asia-Pacific region currently controls the majority of the market due to the strong uptake of electric cars (EVs) in countries like China, India, and Japan.
- Prices are expected to decrease as supply-chain issues improve, and sales continue to soften.
Recent auto trends show that customers prefer to experience a car or dealership before purchasing. Top car brands are embracing VR as part of their dealership photography strategies to further enhance the customer experience. OEMs like Toyota, Hyundai-Kia, Renault-Nissan Mitsubishi, and Stellantis already have a large portfolio of hybrid variants, including mild and full hybrids. At the same time, BYD, Stellantis, and Volkswagen are focused on designing a stronger PHEV portfolio. Hyundai plans to ramp up its hybrid offerings under its ‘Hyundai Way’ strategy from seven to 14 models by 2030. Toyota continues to emphasize hybrids as a critical part of its electrification strategy.
With the new administration of Donald Trump in January, the trade war with China will have a major impact on the automotive industry in 2025. Displays will also be a key driver of automotive technologies in 2025, from microLEDs to the production of holographic windscreens and smart glass. Belgian startup Apache Automotive develops the APH-01, a T3 prototype for extreme terrain. It combines a gasoline engine with an electric motor to enhance fuel efficiency and reduce emissions.
Cars have become even more connected
- Whilst the U.S. may be bucking it, there is certainly a global trend towards a more sustainability-forward manufacturing scene.
- System downtime caused by these attacks reached $1.99 billion, compared to $1.3 billion in 2021.
- They also enable software updates, enhance entertainment, and facilitate smooth communication in connected and software-defined vehicles.
- Along with battery-powered electric vehicles, fuel cell electric vehicles (FCEV) are another alternative to internal combustion engines.
- As a result of this partnership, Ford is expected to launch its own self-driving car business.
The evolution of self-driving and connected cars is simplifying driver-vehicle interaction. Human-machine interfaces (HMIs), including voice-based and haptic feedback systems, are expanding control over various car functions. Moreover, V2X communication systems allow vehicles to interact with each other and infrastructure, improving traffic flow and reducing accidents. These innovations collectively propel the industry towards safer, more efficient transportation. Consequently, the global autonomous vehicle market size is projected to reach USD 448.6 billion by 2035, growing at a CAGR of 22.2%. For this in-depth research on the Top Automotive Industry Trends and startups, we analyzed a sample of 4859 innovative automotive startups & scaleups worldwide.
Important Auto Industry Trends (2025-
- The platform enables visibility across the entire claims cycle and supports both OEM and aftermarket sourcing.
- Crucially, the order halts federal funding for EV infrastructure projects, such as charging station programs, until they align with the administration’s policy goals.
- Automakers need to redesign their vehicles or should look for other chip options available.
- The autonomous vehicle sector will advance as UN regulators lift their speed limit.
- Emerging companies are working to build the first fully autonomous vehicle for city roads, which in turn accelerates the advancements in-vehicle connectivity and IoT.
- Self-driving taxis are already available in parts of China and several US cities.
- It encourages OEMs to develop subscription models, short-term rentals, and multi-modal transport integration.
The platform allows autonomous vehicles to discover AVs, service providers, or clients around them. The vehicle-to-vehicle (V2V) communication is either on-blockchain, with smart contracts or off-blockchain using DAV’s protocols. The startup develops protocols for drone charging networks, drone flight planning, and open mobility. Big data and advanced analytics play a crucial role in decision-making throughout a vehicle’s lifecycle. Vehicle-generated data facilitates predictive maintenance, fleet management, and accident response. Additionally, customer data drives sales, optimizes supply chains and informs new vehicle designs.
Discover how these shifts improve charging, safety, and sustainability and what they mean for your business. The AI systems also learn about the driver’s preferences in music and temperature, making the driving experiences as enjoyable as possible. Many auto manufacturers are considering integrating in-car payments to ease refueling, paying for parking or tolls, and even grocery shopping.
Automotive Industry Trends 2025: Shifting Gears Toward Innovation
It encourages OEMs to develop subscription models, short-term rentals, and multi-modal transport integration. Shared mobility also influences vehicle design toward durability, modularity, and connectivity. Artificial intelligence (AI), the Internet of Things (IoT), blockchain, and advanced semiconductors allow autonomous driving, predictive maintenance, and secure connectivity.
Artificial Intelligence in the Automotive Industry
The software integrates a one-shot multitask network capable of performing 2D detection, semantic segmentation, and monocular depth estimation. It processes these tasks in real time at over 120 frames per second on consumer-grade graphics processing units (GPUs). Indian startup General Intelligence creates self-driving intelligence software that supports software-defined vehicles in adapting to diverse driving environments.
Hybrid vehicles are becoming increasingly popular—they combine electric power with the reliability of a combustion engine. Compared to EVs, they don’t require charging, but at the same time reduce carbon emissions. However, it’s estimated that there will be 33 million autonomous vehicles on the road by 2040. Consumer trends in the automotive industry reveal that short videos are more effective than text in converting leads into customers in the automotive industry. Dealerships can take advantage of various videos, such as how-to videos, car highlights, and customer testimonials. The modernized vehicles available in the market have opened an opportunity for the firms that supply and also manufacture the parts.
The chip shortage is one-factor holding cars back from getting to the dealership lots. But, there are other various supply chain issues and factory closures that have led to low inventory, too. After demand started coming back, there simply wasn’t an adequate supply of chips, and the auto industry has been feeling the effects ever since. The parts industry is benefiting from the ever-increasing average age of vehicles on the road. The two purportedly plan to begin manufacturing an autonomous Apple electric car as of 2024.
KonnectShift provides IoT-based Fleet Optimization
These advancements are critical as manufacturers aim to balance efficiency, durability, and safety. The automobile seminar is utilized by a lot of experts working in the automotive industry, researchers, and people with an affinity for the carmaker as a forum for sharing knowledge and collaboration. They are discussing the prospect of AI for driving systems, the implications of some regulatory changes for automotive innovation, and the potentials of renewable safe holiday lets on wheels start with VIN sources for energy for the automobiles. Traditional internal combustion engine (ICE) vehicles are steadily losing ground as governments worldwide implement stricter regulations, including the EU’s upcoming ban on new ICE vehicle sales by 2035. This regulatory advancement, combined with growing environmental awareness, is accelerating the shift towards electric mobility.
Chip Shortages Continue to Plague Auto Manufacturers
5G connectivity unlocks ultra-low latency communication, enabling real-time vehicle-to-everything (V2X) interactions. This enhances autonomous driving capabilities, traffic management, and safety features. It also supports over-the-air (OTA) updates with larger data payloads and faster speeds, improving software reliability and feature rollout. For consumers, 5G means richer infotainment, seamless smartphone integration, and enhanced navigation services. The automotive ecosystem will become more interconnected, paving the way for smart cities and mobility-as-a-service (MaaS). The transition to electric vehicles has moved beyond early adoption and is now something of a global imperative.
- All of this puts the auto industry at the back of the line when it comes to receiving chips.
- 50% of buyers are willing to opt for EVs, so businesses should surely focus on marketing electric vehicles to make their brands more broader.
- This includes pre-owned electric and hybrid vehicles, and dealerships now offer certified pre-owned cars that look and function like new ones at a lower cost.
- By leveraging tech and sustainable practices, the automotive sector can meet the challenges of tomorrow while delivering exceptional value to consumers.
- Looking ahead, there is no doubt that the automotive industry is on the brink of a paradigm shift driven by unprecedented technological advancements and a commitment to sustainability.
- Explore the most important trade fairs and conferences to boost your business success.
For instance, Audi and BMW vehicles exchanged sensor data, including camera feeds, during 5G-V2X Direct demonstrations in Berlin. This data alerted drivers to pedestrians and cyclists before they became visible. Dedicated short-range communication (DSRC) based on IEEE 802.11p facilitates direct vehicle-to-vehicle and vehicle-to-infrastructure communication. For instance, Volkswagen integrated DSRC-based V2X technology into its Golf 8 and its ID electric series in Europe. Moreover, it enables companies to customize their fleet by choosing preferred brands, models, and service options, ranging from premium to ultra-luxury vehicles. Moreover, blockchain and digital contracts enhance security and automate billing.
Automakers need to redesign their vehicles or should look for other chip options available. The autonomous vehicle (AV) market is on an impressive growth trajectory, expected to surge from a market value of $1,921.1 billion in 2023 to a staggering $13,632.4 billion by 2030, with a CAGR of 32.3%. A major driver of this growth is the increasing focus on commercial applications, such as logistics and ride-sharing services. Advances in AI, sensor technology, and connectivity are also playing a key role in improving the safety and adoption of autonomous vehicles. The global automotive semiconductor market is expected to grow at a rate of 8.1% between 2023 and 2030.
The startup enables automakers to reduce waste, optimize design processes, and advance sustainable manufacturing strategies. The automotive industry is one of the most severely affected by supply chain disruptions. Currently, its greatest challenge is uncertainty and instability, which are expected to persist this year.
💡 Related Insights: Diving Deeper into Specific Automotive Niches
Cybersecurity protects these connected systems, while regenerative braking and sustainable manufacturing practices reduce the environmental impact. EVs drive the shift to greener mobility and it is aided by advancements in semiconductors for smarter and efficient vehicles. OEMs are investing billions in EV platforms, battery R&D, and charging infrastructure partnerships. Legacy brands like Ford, GM, and Volkswagen are launching dedicated EV lines, while startups like Rivian and Lucid push luxury and performance boundaries.
Automotive’s 2025: Gearing Up for a Sustainable and Intelligent Future
Connected cars are vehicles that use wireless means to connect to the Internet of Things. They offer a safe, comfortable, and convenient multimedia experience with on-demand features that allow users to browse the web while in their vehicle. They provide various features such as remote diagnostics, vehicle health reports, 4G LTE Wi-Fi hotspots, turn-by-turn directions, and warnings of car health issues. The technology has already processed over a billion customer requests and is set to grow in 2025 with predictive intelligence and maintenance technology. Conversely, in Europe, regulations are scaling up in preparation for the EU ban on new ICE vehicles by 2035. Chinese EV automakers’ expansion into new markets, including Europe, other Asian countries, and Latin America as previously mentioned, could see a completely new global EV landscape.
Indian startup RevitsOne offers AI-powered fleet-management software that is suitable for fleets of varying sizes. The startup’s vehicle management system provides insights into speed, running vitals, and health information. Drivers benefit from Voicera ID, a voice-based virtual assistant that helps them keep track of the information they need. Additionally, the onboard speed recorder limits the speed to discourage dangerous driving behaviors. Singapore-based startup Beam focuses on e-scooters to promote shared mobility in the Asia-Pacific region. Their scooters use an aviation-grade aluminum frame and are customized for sharing, safety, reliability, and durability.
Sustainable manufacturing lowers emissions, which allows automakers to meet compliance requirements and reduce their environmental footprint. Cleaner production methods reduce operating costs and free resources for reinvestment in new technologies. In 2025, electrification and software integration will have an essential impact on the automotive industry. These tendencies are long-term and are expected to continue shaping the auto industry in the near future. In the next section, we’ll explore these and other automotive sector trends in more detail, and see how they will evolve in 2025. Environmental concerns and technological innovations are advancing faster than many anticipated.
Get in touch to easily and exhaustively scout relevant technologies & startups that matter to you. Operating from Germany and the US, EcoG is a startup offering an IoT-based operating system and platform for EV charging. The startup provides manufacturers with tools that make the development and maintenance of EV charging infrastructure simple, fast, and scalable. It also allows operators to integrate services and microservices in the chargers to make the charging process profitable. In addition, the solution works with any EV charger and enables new features to be shipped throughout the network.
By 2025, the sector is expected to experience continued technological advances, heightened sustainability efforts, and shifting market dynamics. In this article, we’ll explore the significant focuses of the automotive industry in 2025, ranging from electric mobility to autonomous driving and sustainability initiatives. In 2024, the automotive industry is increasingly integrating cutting-edge technologies into its operations.