Automotive trends in 2025 impacting middle-market organisations RSM Global

Sustainability is a major driver reshaping vehicle design, manufacturing, and lifecycle management. Governments worldwide are imposing stricter emissions standards and incentivizing zero-emission vehicles (ZEVs). This pushes automakers to invest heavily in electric drivetrains, recycled materials, and circular economy practices.

Q) What are the predictions for the automotive industry?

• Automakers integrate these systems to offer more reliable vehicles across global markets.
• As we progress through 2025, these trends will continue to reshape the automotive landscape.
• Artificial Intelligence and Smart Factory technologies are no longer aspirational but integral to modern automotive manufacturing.
• A recent survey reveals automotive companies have product development and launch cycles shorter than 18 months.
• Its intelligent asset tracking defends vehicles against spoofing, ransomware, and remote control attempts.
• The platform also erases personally identifiable information (PII) from vehicle systems to maintain privacy.

This simplifies the transition to electric vehicles for fleets, reducing environmental impact and promoting safer urban transport. For this in-depth research on the Top Automotive Trends & Startups, we analyzed a sample of 6000+ global startups & scaleups. However, automotive executives need help as they focus on new technology that meets consumer and regulatory demands. This has led to a shift away from traditional automotive infrastructure, which focused on powertrains, interiors, electrical systems, and safety systems. Information technology has become a crucial part of the recent trends in the automobile industry as priorities change over time.

Electric Cars.

• The fleet of light-duty EVs has grown in the last four years by more than 14 times with a very significant, 17-times increase in the fleet of plug-in hybrid vehicles (PHEVs).
• Recycling initiatives, such as reusing EV batteries, further emphasize the industry’s shift toward circular manufacturing.
• In Europe, the new General Safety Regulation II (from July 2024) and related standards embed connectivity, advanced sensors, and cybersecurity requirements into safety compliance frameworks.
• A Deloitte UK study found that 52% of all consumers show no interest in car subscription models; interest is higher among younger people (age 18-34).
• With consumers increasingly prioritizing environmental performance when purchasing vehicles, automakers must focus on reducing emissions and developing more sustainable transportation options.
• The push toward electrification is reshaping the automotive manufacturing landscape.
• The automotive industry is highly dynamic, and these trends are subject to change over time.
• This both lowers costs and improves vehicle performance, addressing both market demands and sustainability goals.
• Key players like Bosch, Continental AG, and ZF Friedrichshafen AG are investing in technological advancements.

Further, through its smart management app, it enables users to schedule charging, monitor consumption, and manage fleets from one platform. Moreover, the startup installs Tesla motors and Fellten battery systems, which provide up to 295 horsepower, enable flexible range options, and ensure authenticity through fully reversible conversions. Also, adoption rises quickly, with China reaching 50% EV penetration in 2024, and in India, over 18.8 lakh EVs are supported under FAME schemes till June 2025 by the government. Declining battery costs move EVs closer to price parity with combustion vehicles. While the market for cars valued below $80k is expected to remain flat through 2031, the luxury car market is predicted to grow at up to 14% CAGR. The chip shortage is one-factor holding cars back from getting to the dealership lots.

• For instance, Volkswagen integrated DSRC-based V2X technology into its Golf 8 and its ID electric series in Europe.
• Tesla already employs single inverter housings across its models, offering efficient integration of power electronics.
• 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.
• They also facilitate the management of maintenance and repair appointments, streamlining dealership operations.
• Moreover, V2X communication systems allow vehicles to interact with each other and infrastructure, improving traffic flow and reducing accidents.

Top 10 Emerging Automotive Industry Trends 2025 and Beyond

The EU’s Green Deal and its accompanying “Fit for 55” initiative aim to cut carbon emissions drastically by 2030, piling new expectations on manufacturers to reduce their environmental impact. Adding to the challenge, measures such as stricter Euro 7 tailpipe standards and updated rules on battery recycling demand deeper innovation within supply chains and operations. The global automotive industry, responsible for 10% of the world’s carbon dioxide emissions, faces ongoing pressure to overhaul its practices. However, the landscape is proving difficult to steady with an intricate maze of regulations that differ by country or region and lack a unified benchmarking process for sustainability.

By 2025, 48% of light vehicles sold across 43 major economies will be SAE level 2

Despite initial scepticism, the automotive industry is embracing enhanced connectivity by enabling real-time updates and post-production feature additions. Through our work with automotive innovators, we witness first-hand how rapidly this sector is evolving. From electrification and software integration to new mobility models, the industry faces unprecedented change. AI and ML solutions process multimodal sensor data to power autonomy, predictive maintenance, and personalization. For instance, Qualcomm states that C-V2X allows vehicles to communicate with other vehicles, with infrastructure (V2I), and with vulnerable road users.

• EV sales grew from less than 1% of total vehicle sales a decade ago to more than 4% today.
• It uses AI-powered damage recognition, estimation, and work distribution to streamline repair processes.
• 2025 is shaping up to be an interesting year for automotive with regards to global shifts in the market with a mixed bag of potential harmony and disruption.
• On the other hand, personal vehicles are on the rise due to improving urban road infrastructure, and the popularity of pre-owned cars among young people is also driving the market growth.
• 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.
• This growth is driven by the increasing adoption of electronic control units (ECUs) in modern vehicles and the rising implementation of advanced safety systems.
• The automotive industry stands at a thrilling crossroads, where innovation meets complexity and opportunity rides alongside challenge.
• It is anticipated that used-vehicle sales will not return to pre-pandemic levels of around 40 million units per year until 2025, similar to new-vehicle sales.

ThinkSeed transforms In-car Experience

The Wall Street Journal reports that dealerships have been known to charge $40k above MSRP on luxury cars. In some cases, car dealerships are charging huge markups on the inventory they do have. Even six months into 2022, vehicle manufacturers haven’t been able to correct the issue of low inventory. Reports from 2022 showed vehicle inventory was stagnant, sitting between 1 million and 1.1 million vehicles, for the first six months of the year. Sales of passenger cars were down 25% in the first half of 2022 compared to the same period in 2021.

Phenikaa X provides Intelligent Transportation Solutions

Google and Ford recently announced a connected car partnership called Team Upshift. This type of vehicle is defined by its ability to communicate with other software systems and collect data from its surroundings. And TuSimple is hoping to begin selling completely autonomous Level 4 trucks to fleet operators in 2024. In addition, more than half of all vehicles are expected to fall into the Level 1-5 range in 2024.

Stop Guessing, Start Growing 🚀

Avvenire focuses on sustainable mobility to contribute to a cleaner environment and meet the demand for green transportation. With zero emissions, low noise, and a range of up to 400 km, FALAK offers a sustainable urban mobility solution. The startup emphasizes comfort with electric doors, extended safety features, and panoramic views from all seats. Advances in solid-state batteries promise higher energy density and faster charging times, while the expansion of ultra-fast chargers addresses key barriers to EV adoption.

Major Shifts in China’s Automotive Industry

• Singapore-based startup Beam focuses on e-scooters to promote shared mobility in the Asia-Pacific region.
• AI, automation, and an ‘electric-first’ mindset are impacting every industry, and automotive is no exception.
• Many auto manufacturers are considering integrating in-car payments to ease refueling, paying for parking or tolls, and even grocery shopping.
• The booming e-commerce industry is essential to the global online car buying demand.
• As we look forward to 2025, RSM’s automotive professionals predict a slowdown overall in the growth of the industry as well as a reduction in overall margins and profitability.

Autonomous tech will likely be bundled with subscription services, reshaping mobility economics. From electric vehicles zipping past gas guzzlers to cars that update themselves like your smartphone, the industry is in the middle of a revolution. Did you know that EVs are projected to make up nearly 20% of global vehicle sales in 2026? That’s no longer a distant future — it’s happening now, and it’s transforming everything from manufacturing floors to your driveway. Connectivity is one of the key trends in automotive industry, and 5G is what takes it to a more advanced level.

Electric Mobility

Also, automotive Ethernet and time-sensitive networking (TSN) provide deterministic in-vehicle data highways that keep safety-critical communication reliable. In addition, SWYTCHD includes access to premium electric scooters and cars such as the Ola S1 Pro, Ather 450X, TVS iQube, and Nexon EV. This approach enhances road efficiency and reduces fuel consumption, thereby lowering emissions. Regulations such as Europe’s General Safety Regulation 2 (GSR2), US mandates for automatic emergency braking, and China’s target of 70% Level 2-3 adoption by 2025 compel automakers to improve deployment. US-based startup TeraDAR designs its 4D imaging sensor that enhances sensor fusion by offering the Terahertz wavelength for vehicle perception.

This calls for a thorough analysis of recent trends in the automotive industry, So this blog brings you some of the significant car market trends in 2025 that you must know. 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.

Swedish startup Intended Future utilizes data-driven design benchmarking tools for the automotive industry. Probably the most important trend in the automotive industry is the worldwide shift to electric vehicles (EVs). New vehicle inventory levels till December 2022 were 52% below December 2019 but 56% above January 2022. On the other hand, personal vehicles are on the rise due to improving urban road infrastructure, and the popularity of pre-owned cars among young people is also driving the market growth. Fuel-cell electric vehicles will emerge worldwide in 2025 due to their faster recharge, extended range, and zero emissions. Major car, truck, and SUV manufacturers are investing in fuel-cell electric vehicle development, with the support of countries like China, Germany, Japan, South Korea, and the United States.

• The inherent flexibility of electric powertrains is enabling automakers to reimagine vehicle design, resulting in lighter, more efficient vehicles.
• According to Globe News Wire, the entire market will grow at a CAGR of 5.5% from 2025 to 2033, logging USD 984 billion.
• Soon, this will expand to more complex urban environments as vehicle access becomes increasingly prioritised over ownership among the driving masses.
• It enhances safety via driver-assist features and promises to revolutionize mobility with robotaxis and freight automation.
• Israeli startup NoTraffic develops an AI-powered traffic signal platform that digitizes road infrastructure management and connects drivers to the city roadways to manage various traffic-related challenges.
• The used car market is also expected to become more important for consumers looking for cheaper EVs, which typically face greater levels of depreciation than internal combustion engine vehicles.
• It combines advanced AI algorithms and hyper-speed teleoperations for human-assisted guidance in unique situations.
• Also, additive manufacturing makes prototyping more rapid, which enables faster design and testing periods for new vehicles.
• The auto industry is one of the largest and most influential markets on the planet.
• For example, Hyundai partners with Revv in India to expand subscription offerings through a mobile-first platform.

These units support CCS2 and CHAdeMO standards, ensuring broad adaptability across EV models. For example, Qualcomm released reports and white papers highlighting C-V2X as a critical capability for intelligent transportation systems. They also emphasize that regulatory support and infrastructure readiness are essential for large-scale deployment. BMW’s Neue Klasse illustrates this shift with four superbrains that reduce wiring by 600 meters and reduce vehicle weight. This centralization allows faster product cycles, OTA updates, and cross-domain features.

Make sure you stand out from your peers by focusing on every difference between VIN and HUD tag info intricate detail through marketing and staying at the top of buyers’ minds. The future of automotive industry trends suggests that the automotive parts market will grow aggressively due to a growing demand for replacement parts and an increase in vehicle production. The segment’s sales will rise in the first six months of fiscal 2025, while the industry’s revenue will increase at the same pace to $33.8 billion.

Integrated Powertrains will be Standard in EVs of the Future.

The automotive industry stands at a thrilling crossroads, where innovation meets complexity and opportunity rides alongside challenge. The industry will continue to experience disruptions from geopolitical headwinds to regulatory and legislative developments, data security and economic challenges. Maximising the ROI to investors and stakeholders while remaining competitive will be priorities of the industry. The continued global expansion of various players will require a strategic focus on supply chain efficiencies and may bring transformation and consolidation in the industry. Figures from the last few years show that the EV adoption rate is still slow at a global level.

Luxury Car Brands See Growth

The automotive industry is set to witness huge growth in integrated drive ePowertain systems that reduce weight and cost and offer improvements like enhanced vehicle range and efficiency. In the future, advanced integrated solutions will dominate, leading to lighter and more efficient electric powertrains and driving the next generation of high-performance and mass-market EVs. The integrated powertrain segment is likely to hold ~60-65% of the total e-powertrain market in 2025. Connected cars create new revenue streams via subscription services, data monetization, and personalized experiences. However, it raises privacy and cybersecurity concerns that OEMs must address to maintain consumer trust. The connected car market is a battleground for tech giants and traditional automakers alike.

AI to Impact All of the Automotive Trends

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. 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.