In addition, assembling a car involves a massive number of parts (30,000 on average), with materials accounting for a significant portion (40-50 percent) of the manufacturing cost. To maintain cost competitiveness, automotive procurement teams must be critical in managing supplier networks and supply chains for existing and upcoming vehicle models. This includes aligning new technologies and business models with the company’s vision. With consumers increasingly prioritizing environmental performance when purchasing vehicles, automakers must focus on reducing emissions and developing more sustainable transportation options. Most car buyers now consider a vehicle’s environmental impact before purchasing, with many willing to pay a premium of over £2,000 for greener emissions.
Connected Vehicle Technologies
This continues a trend in the EV industry, which has been challenged by the high cost of vehicles and a lack of charging stations. They have downgraded their EV targets and scaled back production of fully electric vehicles, suggesting that the transition to EVs will take longer than previously expected. The automotive industry leads in technological innovation that will reshape vehicle design, construction, and user experience in 2025. Emerging automotive industry trends include the increased adoption of electric vehicles (EVs), advanced semiconductors, and the growing focus on vehicle cybersecurity.
Artificial Intelligence in the Automotive Industry
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. By 2025, V2X technology is expected to significantly create more innovative transportation networks and advance autonomous driving capabilities. 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.
Auto Sales Impacted by Low Inventory and High Prices
From electrification to IoT connectivity, these shifts are changing the way cars are manufactured, sold, repaired, and driven. Shared micromobility vehicles are becoming a popular mode of transportation in cities where the pollution from cars and traffic congestion is particularly evident. Chip shortages have been causing myriad changes to trends that affect the automotive trends that are not all positive.
Automotive Industry and Market Trends
For the eighth time, we asked managers and decision-makers in the automotive industry which trends and developments they are currently focusing on. The automotive industry report of the Future Readiness Monitor 2025 provides differentiated insights into strategies, challenges and fields of action in the industry. The trends in automobile industry and startups outlined in this report only scratch the surface of automotive innovations that we identified during our in-depth research. Identifying new opportunities and emerging technologies to implement into your business early on goes a long way in gaining a competitive advantage. 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.
Automakers like Toyota and QuantumScape are heavily investing in this technology, and we can expect breakthroughs in battery chemistry and design in the coming years. As urban areas grow more congested, the focus is shifting from traditional car ownership to mobility-as-a-service (MaaS) models. Fleet-as-a-Service (FaaS) solutions, particularly autonomous fleets, are set to transform how people navigate cities. By 2025, nearly all new vehicles are expected to feature advanced connectivity options, integrating aspects of digital life directly into driving experiences.
- They shift the industry toward electrification, digitalization, and connected mobility.
- Significant investments in AI and Internet of Things (IoT) devices are crucial for fine-tuning self-driving algorithms, making them safer and more reliable.
- 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.
- It combines a gasoline engine with an electric motor to enhance fuel efficiency and reduce emissions.
- And TuSimple is hoping to begin selling completely autonomous Level 4 trucks to fleet operators in 2024.
- Global supply chain disruptions over recent years have prompted manufacturers to rethink strategies.
- However, as per the new Agency model, we will get to see that the people would directly be dealing with the OEMs and the dealer’s profit would be shared by OEMs.
How is the automotive industry adapting to the shift towards electric vehicles?
The Starkenn Brake Safe, a collision mitigation system features automatic emergency braking in critical scenarios. AI-powered semiconductors drive transformation in autonomous driving systems by enabling real-time communication with road infrastructure and enhancing safety features such as emergency braking systems. Tesla’s relentless drive to expand its global gigafactory network has been a defining feature of 2024.
Evolving video marketing & environmental sustainability
The AI in Automotive industry in 2026 is evolving as AI, autonomous technologies, and software-defined vehicles reshape global mobility systems. This AI in Automotive Market Report examines the trends and technologies driving vehicle intelligence, operational efficiency, safety advancement, and data-driven mobility innovation. What initially appeared to be a niche sector is now the foundation of the auto industry’s transition.
- Prices are expected to decrease as supply-chain issues improve, and sales continue to soften.
- This communication system is crucial for the safe deployment of autonomous vehicles, as it will enable them to “talk” to other vehicles and infrastructure, reducing the risk of accidents.
- Its bidirectional charging system enables EV batteries to both draw electricity and feed surplus power back, which balances demand during peak hours and reduces strain on infrastructure.
- Indian startup ThinkSeed develops middleware solutions that enhance smartphone connectivity to vehicles for secure access and infotainment.
- Localized production and sourcing are gaining momentum as companies aim to mitigate risks and ensure a steady supply of components.
- The integration of 5G networks is accelerating advancements in vehicle-to-infrastructure (V2I) and vehicle-to-vehicle (V2V) communication, supporting autonomous driving functionalities.
- Personalising the IVX will drive the need for AI agents, which is one reason why EDA tool vendor Synopsys is working with Sima.ai.
- Its product range includes an electric modular chassis, the standard autonomous shuttle pod, and pods for other applications.
- Brands need to provide specific offers by analyzing their customer’s needs, preferences, and behavior.
Jeep Recon Aims to Define Electric Off-Roading
At the same time, a limited EV infrastructure and uneven policy application dampen the pace of meaningful progress throughout the region. When it comes to the benefits of connected cars, it seems that drivers are more willing to allow for data collection, too. The same report states that 68% of drivers believe car companies should collect personal data, but only 5% agree to unrestricted collection. Most favour an opt-in approach (63%), and many are willing to share data for benefits, with 67% open to lower insurance rates, 43% for personalised features, and 36% for improved safety options. As will be discussed later, with more data being collected for premium features, the inevitable concern for data security is raised, and cyber security threats loom overhead.
- The market for micromobility sat at $40 billion in 2020 and is expected to grow to $195 billion by 2030.
- Investors support companies with strong sustainability commitments, channeling funding toward greener production.
- Fuel-cell electric vehicles will emerge worldwide in 2025 due to their faster recharge, extended range, and zero emissions.
- The automotive industry is being altered by the integration of Artificial Intelligence (AI), which is powering a new wave of smarter and more personalized innovations.
- As technology progresses, expect these trends to influence every facet of the automotive sector.
- By 2025, significant investments in fast-charging networks will be essential for EV adoption to reach mass-market penetration.
Automotive Sourcing Models are Changing
Chatbots and messaging solutions are key technology trends in the automotive industry. These tools enable dealerships to handle inquiries efficiently, freeing time for other tasks. They also facilitate the management of maintenance and repair appointments, streamlining dealership operations. Voice search assistants also optimize their interface for advertisements and voice search queries.
Electric Vehicle (EV) Production Expansion
As cities become more congested, shared mobility solutions are becoming increasingly popular. In 2025, we expect to see more automated and electric shared vehicles providing affordable, on-demand transportation. Autonomous driving is one of the most prominent applications of AI in the industry. It incorporates various AI-powered technologies like adaptive cruise control, automatic emergency braking, and lane-keeping assistance, allowing vehicles to navigate complex road conditions autonomously. These systems can detect objects, evaluate road environments, and make real-time decisions to further enhance safety and comfort.
Governments are implementing innovative policies to encourage sales without increasing costs or benefiting high-income households. Car dealerships are no exception, as recent auto trends reveal that customers prefer to experience a car or dealership before purchasing. Top car brands and dealerships are embracing VR as part of their dealership photography strategies to improve the customer experience.
Used car industry trends
The push toward electrification is reshaping the automotive manufacturing landscape. By 2025, we will see increased investments in EV production as automakers cater to evolving consumer demands and regulatory pressures. However there are huge opportunities for the industry in the shift to software-defined vehicles and what to expect in a license plate report autonomous driving. These shifts are beneficial to ARM, STMicroelectronics, NXP Semiconductors and Infineon Technologies. While there are a lot of opportunities ahead for the industry, there will be plenty of challenges like cost pressures, growing competition, and globalization. The growing shared mobility trend also looms as more people are using shared transportation methods instead of owning cars.
These advancements are driving the future of connected vehicles, which are increasingly becoming a standard feature in new cars. Modern vehicles are now equipped with a unique digital identity, making it easier to track and share data for applications like insurance, driver safety, predictive maintenance, and fleet management. Nigerian startup Revive Earth develops the Revive Kit, to convert petrol vehicles into efficient EVs.
⚖️ Regulatory Hurdles and Ethical Dilemmas in Autonomous Tech
Transparency rules such as the EU’s Corporate Sustainability Due Diligence Directive and the US Uyghur Forced Labor Act add pressure for stricter supplier oversight. This transition offers shorter lead times, reduced tariff exposure, and a stronger crisis response. It re-engineers proven EV technology and applies it to Land Rover Defenders, Range Rover Classics, and Series models from 1949 to 2016. It does so to preserve their heritage design and deliver zero-emission performance.
Statevolt’s decision to build its gigafactory in the UAE rather than Europe has been a talking point this year. This article explores the strategic reasons behind the move, including the UAE’s favourable energy policies, market accessibility, and logistical advantages. By leveraging these factors, Statevolt is positioning itself to meet the rising demand for EV batteries in an increasingly competitive market.
- AI, ML, and computing allow vehicles to process data points per second with split-second precision.
- The data of all road users is streamed and processed in real-time to empower smart mobility.
- “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.
- Moving further east, Thailand’s electric car sales quadrupled, aided by subsidies and Chinese carmaker investments, positioning the country as a potential EV manufacturing hub.
- The World Health Organization links 1.36 million annual deaths to road accidents.
- Supply chains are being restructured to secure critical minerals and diversify chip sources.
- Its image-signal processor manages approximately 1 billion pixels per second from high dynamic range (HDR) sensor inputs.
Leap Business Solutions advances Fleet Management
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.
Connected vehicles are entering a software-defined era where 5G, AI, and V2X convert cars into real-time data nodes that communicate smoothly with infrastructure, other vehicles, and the cloud. Our new report spotlights 10 connected vehicle trends to watch in 2026 that promise safer, smarter mobility and fresh revenue streams for automakers. Curious how electric vehicle trends like solar integration, AI-powered systems, and modular design are innovating mobility? This report explores the top 10 electric vehicle trends shaping the industry in 2026. Discover how these shifts improve charging, safety, and sustainability and what they mean for your business.
Semiconductor experts say manufacturers won’t see a return on investment if they build new foundries to meet the auto industry’s demand. They’re so important that one analyst said, “semiconductors have moved ahead of oil as the world’s key commodity input for growth”. Explore competitors’ website traffic stats, discover growth points, and expand your market share. In addition, the initiative will leverage the data collected by adding Google’s AI capabilities to Ford vehicles.
