Explore the most important trade fairs and conferences to boost your business success. Contact Avenga today to learn more about what industry experts have to say about these trends. For instance, China has introduced policies encouraging automakers to procure up to 25% of their chips domestically by 2025, reducing reliance on foreign suppliers. There will be continued demand for legacy process technology, with the construction and facilitation of the ESMC fab in Dresden progressing through 2025. Whether this central compute is a monolithic chip such as Nvidia Thor, which will be detailed in 2025, it will also be constructed from chiplets.
Shared mobility
Toyota’s North Carolina battery plant exemplifies this commitment, with operations fully powered by renewables. Recycling initiatives, such as reusing EV batteries, further emphasize the industry’s shift toward circular manufacturing. “Advanced sensors will make a significant impact on ADAS solutions by providing more accurate data and improving safety maneuvers, from lane-keep-assist to auto parking and braking,” added Lyons. The automotive industry was perhaps the saving grace of the European semiconductor industry in 2023, but reality has hit hard in 2024. 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. With EV makers in China engaging in a price war due to declining demand, Chinese brands with strong hybrid presently are gaining popularity.
- The currently available infotainment systems can connect with smartphones, sensors, ADAS (advanced driver assistance systems) as well as other in-vehicle and external systems.
- Expect more robotaxi pilots, fleet autonomy, and advanced safety features integrated into mainstream cars.
- The strides made in EV battery innovation, renewable energy adoption, and sustainability are paving the way for a more resilient and forward-thinking industry.
- The auto industry is one of the largest and most influential markets on the planet.
- In addition, the ecommerce automotive aftermarket market is worth an estimated $85.28 billion.
- 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.
Tree Map reveals the Impact of the Top 10 Auto Industry Trends
With 2024 now firmly in the rearview mirror, let us dive into how those trends have developed into 2025 and what that means for middle-market organisations for the year ahead. In addition, it offers insurance-approved vehicle tracking systems with Thatcham S5 and S7 certification to meet insurer requirements and offers nationwide installation with priority police response. Consumer demand for eco-friendly products is rising, with 80% of US consumers concerned about the environmental impact of their purchases in April 2024, up from 68% in 2023. North America led the AV market in 2024 with over 40% revenue share, while Asia-Pacific is the fastest-growing region, with an expected CAGR of 35% from 2024 to 2033. Its early fusion approach integrates LiDAR and radar data, while neural networks infer road elements and topology to create accurate high-definition maps.
Integrated Powertrains will be Standard in EVs of the Future.
It also provides validation services that ensure resilience against potential risks. German startup CARNIQ Technologies enhances vehicle cybersecurity through web-based and AI-powered tools that ensure compliance with automotive standards. The rapid rollout of software-defined vehicles, vehicle-to-everything (V2X) networks, and electrification pushes automakers to secure digital systems as rigorously as physical components. Moreover, the startup’s marketplace connects professionals in a secure environment. It provides exclusive access to vehicles and optimizes purchase decisions based on supply and demand trends. Also, digital twin technology builds virtual replicas of supply chains to simulate disruptions and optimize performance.
This data-driven research provides innovation intelligence that helps you improve strategic decision-making by giving you an overview of emerging technologies in the automotive industry. In the Automotive Innovation Map below, you get a comprehensive overview of the innovation trends & startups that impact your company. Vietnamese startup Phenikaa-X creates autonomous electric vehicles with AI and multi-sensor technology for safe transportation. Its system uses functional modules, combining LiDAR, radar, cameras, and ultrasonic sensors to perceive surroundings, analyze traffic, and navigate efficiently. A 5G connection transmits data to a remote control station, which allows operators to monitor and intervene when needed. As the industry advances, 2025 will be a defining year in the automotive manufacturing sector.
Vehicle Cybersecurity
Swedish startup Volta Trucks makes Volta Zero, an electric truck for urban deliveries. This vehicle’s design prioritizes driver safety and comfort, featuring a central driving position and panoramic vision for enhanced visibility. The Volta Zero addresses sustainability by enabling zero tailpipe emissions, contributing to cleaner city environments. The US-based startup Udelv provides autonomous vehicles for last-mile deliveries. It combines advanced AI algorithms and hyper-speed teleoperations for human-assisted guidance in unique situations. The vans deliver groceries from nearby stores and send out a push notification when the order arrives.
Automotive suppliers are renegotiating their vendor/supplier contracts to align with these new predictions. What lies ahead is not just a continuation of trends but the potential for transformation that pushes the boundaries of how we move, connect, and thrive. The shortages have forced manufacturers to delay product launches and reduce outputs, among other issues. Asia, home to key production hubs, remains at the epicentre of attempts to address this crisis, with nations like Taiwan investing heavily in scaling chip production. Additionally, Europe and the U.S. have sought to bolster their chip and semiconductor production with the ‘European Chips Act’ and the ‘CHIPS and Science Act’, respectively.
The Future of Automobiles
Blockchain secures supply chains and in-car data, and extended reality (XR) advances design, testing, and training. Additive manufacturing shortens prototyping cycles, and IoT-driven analytics improve predictive maintenance. Australian startup V2Grid designs V2G technology that converts EVs into mobile energy resources for homes, businesses, and the national grid.
A few hybrid models are priced below their EV and ICE counterparts, attracting Chinese consumers to hybrids, especially plug-in hybrid (PHEV) and extended-range hybrid (EREV) models. Further, its Craidlr ATX-G gateways are integral to the surface temperature & vibration monitoring solution, catering to diverse automotive testing needs. These gateways, combined with advanced transducers, facilitate real-time data collection. The Global Startup Heat Map below highlights the global distribution of the 4800+ exemplary startups & scaleups that we analyzed for this research. Created through the StartUs Insights Discovery Platform, the Heat Map reveals high startup activity in the US, Europe, and India.
❓ FAQ: Your Burning Questions About Automotive Trends Answered
- Toyota unveiled its forward-thinking approach to electric vehicle design, focusing on sustainability, performance, and cutting-edge technology.
- 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.
- South Korean startup BOS Semiconductors builds Eagle-N, an AI accelerator for in-vehicle infotainment (IVI) and ADAS.
- This facilitates the integration of Apple CarPlay, Google Android Auto, and media streaming into in-vehicle infotainment systems.
- For businesses, the vehicle subscriptions lower capital requirements and simplify fleet management.
- It also aligns with ISO for cybersecurity and ensures reliability under demanding automotive standards.
- These solutions decrease fleet wait times and cut pollution from petrol or diesel vehicles.
Identifying new opportunities & emerging technologies to implement into your business goes a long way in gaining a competitive advantage. The vehicle’s architecture includes a 3D mapping system that merges GPS and IMU data with digital maps to determine precise positioning and plan optimal routes. Front-facing LiDAR scans the road to detect objects, track pedestrians, and respond to traffic to enhance safety. The startup uses automotive sensors and compute platforms to offer a scalable solution for cars to enable large-scale fleet learning. German startup SafeAD develops a vision-first perception and scene-understanding pipeline for autonomous driving. Further, the Asia-Pacific region is anticipated to witness rapid growth, with a projected CAGR of 18.3%, driven by rising vehicle sales and evolving safety regulations.
For instance, Qualcomm states that C-V2X allows vehicles to communicate with other vehicles, with infrastructure (V2I), and with vulnerable road users. TeraDAR strengthens sensor fusion by providing high-resolution, all-weather imaging that improves vehicle perception and increases safety. Moreover, the startup leverages patented research and extensive radar expertise to deliver dependable detection in densely populated settings. Radar Reticence strengthens sensor fusion by supplying interference-free radar data that enhances vehicle perception and improves safety.
Phenikaa X provides Intelligent Transportation Solutions
As battery technologies evolve, the future promises breakthroughs in recyclability and energy efficiency. Innovations like solid-state batteries are set to revolutionise manufacturing priorities and reshape the EV supply chain. Toyota unveiled its forward-thinking approach to electric vehicle design, focusing on sustainability, performance, and cutting-edge technology. Peugeot introduced groundbreaking technologies like the Hypersquare control system and steer-by-wire, marking a significant leap in electric vehicle design and user experience. These innovations represent the brand’s commitment to redefining driving dynamics in the EV era.
Sustainable production continues to rise
Therefore, these were the five trends transforming the automotive industry this year and beyond. However, overcoming supply chain challenges takes time, so they are likely to remain in 2025. Examples are bikes, scooters, and mopeds, as well as the electric versions of these vehicles.
Modernized and upgraded vehicles with much more technology allow a thunder growth for the markets providing parts of the vehicles. The demand is highest for vehicles under four years old, which have the latest technologies but are less expensive than new cars. 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.
Discover Trending Technologies & Topics
Wireless and ultra-fast charging stations are also emerging as promising solutions to ease the transition to EVs further. Wireless charging could eliminate the need for physical connectors, offering a more seamless user experience. These practices not only meet regulatory demands but also resonate with consumers increasingly drawn to environmentally responsible brands.
Shortage of chips will complicate the automotive industry
US-based startup MotionSafe provides AI-powered cybersecurity solutions that protect connected vehicles from data breaches and cyber threats. Vehicle cybersecurity drives one of the fastest-growing areas in the auto industry as connected vehicles multiply and cyber risks intensify. Analysts project the automotive cybersecurity market to increase from USD 5.24 billion in 2025 to approximately USD 18.88 billion by 2034, advancing at a CAGR of 15.3%. Geopolitical risks, regulatory frameworks, cost advantages, and compliance needs drive the auto industry toward supply chain resilience and nearshoring.
- The platform also erases personally identifiable information (PII) from vehicle systems to maintain privacy.
- Meanwhile, tech companies such as Uber and Lyft continue to expand their digital-first transportation solutions, creating a more competitive and diverse mobility landscape.
- Expected to produce batteries for up to 800,000 vehicles annually, the plant will be powered entirely by renewable energy, demonstrating a dual focus on production efficiency and sustainability.
- This enhances autonomous driving capabilities, traffic management, and safety features.
- Environmental consciousness is driving the automotive industry toward more sustainable and eco-friendly solutions.
- Changing consumer preferences, cost efficiency, technological progress, and sustainability targets drive this innovation.
Moreover, Asia-Pacific is the fastest-growing region, with a projected CAGR of 14.8%. This is fueled by increased vehicle production and sales in China, Japan, and South Korea. The adoption of augmented reality (AR) in head-up displays and automated parking systems is expanding, which is advancing ADAS technologies.
Explore the Top 10 Automotive Trends & Innovations in 2025
However, there are yet to be more autonomous vehicles on the road due to the technological and safety challenges that must be overcome. Driverless cars have sometimes struggled with unexpected incidents on the road and in poor weather conditions. The future trends in the automobile industry suggest that 2025 can be the milestone year for connected cars. The expansion will stem from the speedy spread of data that can be capitalized upon to lower expenses, streamline research and development, enhance products and services, and restrict emissions.
Sensor fusion drives the automotive industry’s shift to autonomy by integrating data from cameras, light detection and ranging (LiDAR), radar, and ultrasonic sensors into a unified perception system. Mercedes-Benz’s Drive Pilot showcases this with over 35 sensors, including LiDAR and radar, working together to achieve certified Level 3 autonomy. In 2026, the auto industry accelerates its transition from combustion-based production to electrified, software-driven, and sustainable mobility. Sustainable manufacturing and EV expansion deliver cost savings, regulatory compliance, and reduced emissions, positioning automakers as leaders in green mobility.
Automotive Events Worldwide
The strong focus on technological advancements in the automotive sphere has also meant that cyber security is becoming a larger concern in a historically unconcerned industry. Threats like supply chain attacks, data breaches, ransomware, and state-sponsored intrusions are on the rise. Of course, the danger does not stop with vehicles as smart infrastructure is also at risk, potentially jeopardising safety and operational reliability. Figures from the last few years show that the EV adoption rate is still slow at a global level. However, the share of cars that are electric (hybrid and full electric) continues to rise. Also, despite the slowing adoption rate, data has shown that the number of electric and hybrid vehicles actually on the road has dramatically increased (from 26 million in 2022 to 40 million in 2023).
- Automotive industry trends refer to changes in patterns within the automotive sector that influence vehicle design, production, marketing, and usage.
- LiDAR sensors enable precise 3D mapping, crucial for vehicle navigation and obstacle detection.
- In China, it was even reported that lithium-ion battery pack prices fell below $100/kWh for the first time.
- In the UK, auto production surpassed one million units in 2023, marking a significant recovery.
- This leaves the vast majority of companies concerned with their supply and wanting for more.
- It also enables customers to schedule and monitor charging activity for improved efficiency.
- The automotive cybersecurity market is projected to reach USD 5.11 billion in 2025, with a CAGR of 18.14% from 2024 to 2034.
It enables sensor fusion and control for advanced driver assistance and autonomous driving. Trends span sustainable manufacturing, EV expansion, supply chain nearshoring, vehicle cybersecurity, automotive semiconductors, sensor fusion, autonomous driving, subscription models, SDVs, and V2X. They shift the industry toward electrification, digitalization, and connected mobility. Due to the pandemic, the automotive sector is undoubtedly facing one of the most challenging periods and a massive slowdown for the last couple of years.
The Tree Map below illustrates the top 10 automotive trends that will impact companies in 2024. 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. It incorporates an intuitive infotainment system for efficient power management while minimizing driver distractions. The control system includes safeguards top gadgets to boost car safety in 2025 like automatic overheating prevention, battery depletion protection, and real-time torque and speed calibration for optimal performance on challenging terrains.
Nigerian startup Revive Earth develops the Revive Kit, to convert petrol vehicles into efficient EVs. It integrates electric drivetrains, transforming existing vehicles into sustainable and cost-effective alternatives to new EVs. The kit maintains original vehicle features to ensure a seamless transition and familiar driving experience. Henkel is using digital simulation tools to co-develop EV battery designs with automotive partners.
Major automakers, such as General Motors, are expanding telematics offerings by integrating subscription-based services like OnStar as standard features across models. Partnerships between telecom providers and automakers, like Targa Telematics’ collaboration with Renault, are enhancing connectivity solutions, particularly for fleet management. The European Union’s Vehicle General Safety Regulation (GSR2), effective July 2024, mandates several ADAS features in new vehicles. The U.S. National Highway Traffic Safety Administration (NHTSA) plans to require automatic emergency braking (AEB) systems in all new light-duty vehicles by 2026. Miniaturization trends in automotive electronics enable the integration of multiple sensors into compact systems to improve vehicle performance while reducing costs. US-based startup Aeluma develops semiconductor technology for mobile devices, AI, AR/VR, autonomous systems, and other applications.