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.
❓ FAQ: Your Burning Questions About Automotive Trends Answered
In 2025, many automakers will focus on creating vehicles that are easier to disassemble, repair, and recycle at the end of their lifecycle. This approach could significantly reduce waste and contribute to a more sustainable automotive industry. Leading companies such as Volkswagen, General Motors, and Volvo have committed to producing zero-emission vehicles and achieving carbon-neutral operations by mid-century. In line with this, automakers focus on sustainability in their manufacturing processes, energy sourcing, and material selection. The SDVs market is set to reach 7.6 million units in 2025 from 6.2 million units in 2024.
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Furthermore, the need for EV charging stations is no longer a challenge to the electric vehicle market. While it’s true that at the end of 2023, there wasn’t an adequate supply of electric mobility hubs, the charging infrastructure in Europe has improved drastically. Currently, there are about 750,000 public charging stations with a combined 28.7 GW of charging capacity. Notably, China, Europe, and the US have established themselves as the leading EV markets, with other countries following suit.
Inside Xiaomi’s EV Factory
- Infineon, the largest manufacturer of auto chips, is increasing its investment in production by nearly $1 billion euros in 2022.
- To meet these new requirements and realize this long-term vision, approaches are required to push against the status quo.
- With customers becoming more demanding, rules and regulations are becoming stricter, and competition is stronger and faster.
- Until these efforts bear fruit, the industry will need to focus on mitigating risks and prioritising demand effectively.
- Let’s have a closer look at the top automotive trends poised to dominate the landscape in 2025.
- As urban areas grow more congested, the focus is shifting from traditional car ownership to mobility-as-a-service (MaaS) models.
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. The uptake in EVs is experiencing a surge, driven by rapid advances in battery technology, an expanding charging infrastructure and supportive government incentives.
- Simultaneously, many automakers embrace vertical integration strategies, taking control of the software stack from chip development to application integration.
- The automotive industry is many things, but it is never idle; it thrives on the pulse of innovation, resilience in hard times, and mobility transformation.
- On the other side of the globe, in Asia, China has implemented a landmark energy policy, aptly named the ‘Energy Law’, as of January 2025.
- Meanwhile, we are seeing the economic case for sustainable materials strengthen as manufacturers realise operational efficiency gains and reduce their long-term costs.
- With the Middle East emerging as a significant player in the EV supply chain, manufacturers must adapt their strategies to seize these new opportunities.
- The increasing adoption of EVs globally drives the optimization of energy usage and enhances features like regenerative braking systems through sensor fusion technologies.
- The future trends in the automobile industry predict a roller-coaster ride for players.
Personalising the IVX family-friendly travel planning guide will drive the need for AI agents, which is one reason why EDA tool vendor Synopsys is working with Sima.ai. Across in-vehicle infotainment (IVI) and advanced driver assistance systems (ADAS), there have been various OEM innovations in the past year, with AI models being integrated into these systems. For example, Mercedes-Benz is using Chat-GPT for intelligent virtual assistants within its vehicles. 94 percent of global automakers are using ARM-based technology for automotive applications, alongside the top 15 automotive semiconductor suppliers in the world adopting ARM technologies in their silicon. 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. From enhancing in-vehicle safety solutions to enabling semi-autonomous driving features, AI is redefining innovations in vehicle functionality and unprecedentedly shaping the driving experience.
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Waymo highlights this in its robotaxi fleet, which processes multimodal data to complete over 250K paid rides weekly with high reliability. Tesla’s Full Self-Driving Computer processes high-rate image input, handling camera streams of up to approximately 2.5 billion pixels per second through its camera serial interface. Its image-signal processor manages approximately 1 billion pixels per second from high dynamic range (HDR) sensor inputs. The system combines this data with inputs from multiple cameras and sensors to enable AI-driven perception and decision-making in near-real-time driving scenarios.
- In Latin America, much like other regions, the electrified vehicle fleet is still only a small share of the total vehicle fleet; however, that share is growing.
- Paul Marinelli gets straight to the point—exploring key trends and innovations shaping tomorrow’s mobility in just five minutes.
- Automakers are adopting greener processes, from sourcing eco-friendly materials to utilizing renewable energy in manufacturing plants.
- The strides made in EV battery innovation, renewable energy adoption, and sustainability are paving the way for a more resilient and forward-thinking industry.
- Chinese startup Chipv offers automotive semiconductors that combine computing capabilities with motor control and power management.
- AI and predictive analytics enhance demand forecasting, risk detection, and sourcing optimization.
What are the predicted future trends in the automotive industry regarding autonomous driving?
We expect to see the concept of Mobility-as-a-Service (MaaS) develop through 2025. Initial deployments focus on simpler, grid-like cities such as Phoenix in the USA, Milton Keynes in the UK, and Singapore. Soon, this will expand to more complex urban environments as vehicle access becomes increasingly prioritised over ownership among the driving masses. The startup’s product range includes residential wallboxes from 7 to 22 kW and commercial chargers up to 132 kW. 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.
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Instead of owning a car, consumers will increasingly use digital platforms to access transportation services on demand, whether through ride-sharing, car-sharing, or subscription models. MaaS is set to become a key focus for the automotive industry in 2025 as companies look to diversify their business models and create new revenue streams. The drive towards electric and autonomous vehicles is further bolstered by progress in machine learning and IoT. Volvo has adopted megacasting techniques to simplify EV production, reducing the number of components required and streamlining assembly processes. This both lowers costs and improves vehicle performance, addressing both market demands and sustainability goals. Autonomous driving will continue progressing from Level 2+ driver-assist to Level 3 conditional autonomy in geo-fenced areas.
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Self-driving vehicles are becoming increasingly common and will continue to do so in 2025. Research has indicated that autonomous cars are safer, reduce downtime, expand the last-mile delivery scope, and improve fuel efficiency by 10%. Additionally, several trucking companies have tested self-driving technology, and it will soon become commonplace, with fleets of autonomous trucks sharing the road with traditional vehicles.
- Sustainability is a major driver reshaping vehicle design, manufacturing, and lifecycle management.
- But, there are other various supply chain issues and factory closures that have led to low inventory, too.
- Moreover, economic efficiency improves adoption, as autonomous vehicles reduce transport costs by up to 40% and maximize logistics utilization.
- Xaba’s proprietary process and AI-driven large-scale 3D printer enable sustainable materials, such as fibers, fiber-reinforced polymers, and metals, to create functional car chassis.
- Created through the StartUs Insights Discovery Platform, the Heat Map reveals high startup activity in the US, Europe, and India.
- Motoreto strengthens supply chain resilience in the auto industry and drives nearshoring by aligning distribution, procurement, and sales with regional market needs.
- Moreover, it ensures perception in challenging conditions such as night, rain, fog, and snow.
What is the future of the automotive industry?
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. There are already over 30 million vehicles on the road that meet the Level 1 standard.
Discover all Automotive Trends, Technologies & Startups
It uses AI-powered damage recognition, estimation, and work distribution to streamline repair processes. Also, its platform manages claims and mechanical breakdowns across vehicle models from manufacturers. Digital replicas and simulations allow manufacturers to test efficiency improvements before implementation. For example, BMW’s San Luis Potosí facility applies digital replicas to reconfigure layouts and minimize waste.
Optimizing mobile experiences & personalization
For our trend reports, we leverage our proprietary StartUs Insights Discovery Platform, covering 7M+ global startups, 20K technologies & trends, plus 150M+ patents, news articles, and market reports. As technology progresses, expect these trends to influence every facet of the automotive sector. When demand for cars plummeted in the early days of the pandemic, auto manufacturers stopped ordering them and chip producers focused their attention elsewhere. The global automotive parts market has been steadily growing for the past twenty years. Europe now is the largest market for new plug-in electric vehicles, overtaking China’s first spot.
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.
Seamless connectivity between automobiles, infrastructure, and pedestrians is expected to become commonplace and help increase traffic safety and improve driver experience. Since we’ve already explored the use of AI in the auto industry, it makes perfect sense to discuss connected cars, which are undoubtedly one of the top trends for the future. Connected cars are equipped with cutting-edge technology that allows them to connect to the Internet, other vehicles, and external software. These cars offer numerous benefits, not just for drivers and manufacturers, but also for passengers and the environment.
The law emphasises a cleaner and more efficient use of fossil fuels, placing a higher emphasis on sustainability and developing renewable energy infrastructures. This comes as China continues to make their presence known in the global EV scene, with ramped-up production and dominance in the international EV market. In 2023, the global connected car market was valued at $80.87 billion and projecting remarkable growth. It is expected to expand from $95.14 billion in 2024 to $386.82 billion by 2032, reflecting a robust compound annual growth rate (CAGR) of 19.2% over the forecast period according to some figures.
It provides grants, loans, and incentives to expand domestic fabs, semiconductor R&D, and the broader supply chain. It offers ready-to-use workflows across system, software, and project management processes. Its MotionSafe Privacy platform uses algorithms to monitor controller area network (CAN) traffic and detect anomalies. The platform also erases personally identifiable information (PII) from vehicle systems to maintain privacy. For example, over-the-air (OTA) updates depend on secure encryption and authentication to block malicious code injection. Likewise, fleet operators strengthen defenses for telematics, routing data, and driver information against manipulation.
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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. 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.
Indian startup SWYTCHD manages vehicle subscription services that focus on electric two-wheelers and cars. This enables an all-inclusive model that replaces ownership with monthly flexibility. Its RC ONE driverless vehicle combines proprietary software and hardware with automotive-grade components to achieve low-speed autonomous operation.
- 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.
- This data alerted drivers to pedestrians and cyclists before they became visible.
- Initiatives and support from the Chinese government, such as pilot zones and regulatory frameworks, are further accelerating the process.
- The Auto Industry Trends & Startups outlined in this report only scratch the surface of trends that we identified during our data-driven innovation & startup scouting process.
- For this in-depth research on the Top Auto Trends & Startups, we analyzed a sample of 3836 global startups & scaleups.
- After a disappointing 2019 in terms of EV sales, 2020 sales surpassed expectations, growing over 40% year-over-year.
Summary – Automotive Industry
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. Consumers increasingly demand eco-friendly options, influencing market offerings. Expect more biodegradable components, renewable energy-powered factories, and battery recycling programs. The trend is irreversible and will accelerate innovation while challenging legacy ICE-dependent supply chains.