Top 10 Automotive Industry Trends in 2025
This article dives into the company’s ambitious production targets, including the development of Gigafactory Mexico and its innovative approaches to battery cell technology. By streamlining its supply chain through vertical integration, Tesla is raising the bar for EV production efficiency and sustainability. As 2024 comes to a close, the automotive manufacturing industry continues to accelerate its transformation. From groundbreaking advancements in EV battery technologies to bold steps toward sustainable production, this year has marked a pivotal shift in how vehicles are designed, built, and powered.
- Global passenger EV sales grew 60% from 6.5 million units in 2021 to 10.5 million in 2022.
- The kit maintains original vehicle features to ensure a seamless transition and familiar driving experience.
- The AV industry itself is just in its infancy, as there are only 17,000 self-driving cars on the road in the US today.
- IoT, AI, and digital twins are becoming essential tools for improving efficiency, reducing downtime, and optimizing production processes.
- Semiconductors enhance safety by enabling faster decisions and reducing accident risks.
Launching of fuel cell EVs
Personalising the IVX 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.
How is the automotive industry adapting to the shift towards electric vehicles?
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.
Transportation
Looking ahead, JLR’s focus on carbon-neutral manufacturing and environmentally responsible practices sets a powerful example for the industry. The answer lies in education, infrastructure, and trust-building—slow but steady wins the race. The software integrates a one-shot multitask network capable of performing 2D detection, semantic segmentation, and monocular depth estimation.
How is technology improving the auto industry?
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.
- Cox Automotive Industry Insights predicted total new-vehicle sales in 2022 of only 14.4 million units, a number that doesn’t even surpass 2020 sales volume.
- Along with an increase in refueling stations, look to see an increase in the variety of FCEVs available to consumers in the coming years.
- Further, as part of larger decarbonization efforts, the Intergovernmental Panel on Climate Change (IPCC) emphasizes the contribution of EVs to the reduction of greenhouse gas emissions.
- These are the old and traditional methods that buyers use to contact dealers or check your products or information about the brand on search engines.
- The automotive industry is highly dynamic, and trends are subject to change over time.
- These advanced technologies are widely used across a great number of industries and the automotive domain is no exception.
- However, growth EV adoption is predicted to slow, with year-on-year growth falling from 15% in 2024 to 11% in 2025.
Autonomous Vehicles (Self-Driving Cars)
Swedish startup Radar Reticence designs radar sensors that advance sensor fusion capabilities in the automotive industry. Its technology applies signal processing algorithms to eliminate interference and ensure radar units operate reliably within the same environment. In parallel, the startup offers carAISuite, an AI-driven tool that automates engineering and compliance activities. It enables systematic results in cybersecurity, functional safety, and process conformance. In addition, the startup strengthens automotive cybersecurity with features such as real-time intrusion detection and automated containment protocols.
Consumer Health in Brazil
Such advancements align with global trends favoring autonomous fleet deployment in urban areas, positioning automakers to meet future demand for self-driving capabilities. Most consumers today are much more concerned with what the in-cabin experience is going to be, than the size and power of the engine. Global economic slowdowns and fierce competition from Chinese manufacturers have slowed the growth of EVs. In 2025, the automotive industry’s digital marketing spending is predicted to keep growing.
Radar Reticence designs Radar Sensors
Hydrogen-powered vehicles produce only water vapor as a byproduct, making them a strong contender for sectors that are harder to electrify, such as long-haul trucking and commercial transportation. This move highlights the industry’s broader trend of building resilient supply chains to safeguard against geopolitical and economic uncertainties. Global supply chain disruptions over recent years have prompted manufacturers to rethink strategies.
💻 Trend 2: The Rise of Software-Defined Vehicles (SDVs) – Cars as Computers
This ensures cybersecurity and reliability for engine control, powertrain management, and other mission-critical automotive applications. Further, Chipv creates power control chips equipped with triple RISC-V cores, extensive on-chip memory, and robust hardware security modules. In the US, the CHIPS and Science Act allocates USD 52.7 billion in funding and offers a 25% investment tax credit.
- 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.
- Due to these advancements, the global automotive IoT market is anticipated to reach USD 56 billion by 2026 at a CAGR of 19% during the period from 2021 to 2026.
- Volvo has adopted megacasting techniques to simplify EV production, reducing the number of components required and streamlining assembly processes.
- This article dives into the company’s ambitious production targets, including the development of Gigafactory Mexico and its innovative approaches to battery cell technology.
- 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.
- Artificial Intelligence and Smart Factory technologies are no longer aspirational but integral to modern automotive manufacturing.
- 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.
Rise in the Adoption of VR Tech
Consumer trends in the automotive industry highlight that short videos are more effective in converting leads into customers. Dealerships can take advantage of different video formats, like how-to videos, car highlights, and customer testimonials. With more and more customers prioritizing environmental sustainability, the focus should be on promoting environmentally conscious manufacturing processes along with eco-friendly cars like electric vehicles. The truck’s design removes the internal combustion engine, advancing commercial vehicle safety standards, and protecting pedestrians and other road users. Volta Trucks also offers leasing or purchasing options, and integrates services like maintenance, charging infrastructure, and training through its truck-as-a-service model. This simplifies the transition to electric vehicles for fleets, reducing environmental impact and promoting safer urban transport.
The foundation of autonomous vehicle architecture lies in a set of sensors, including LiDAR, radar, and ultrasonic systems, providing cars with a 360-degree panoramic view. These sensors measure distances, identify obstructions, and capture crucial traffic and road condition data. When paired with high-resolution cameras, these tools allow self-driving cars to identify objects, lane markers, and even pedestrians with unprecedented precision. While full autonomy is still on the horizon, advanced driver assistance systems (ADAS) are already transforming how we drive.
RevitsOne provides AI-based Fleet Management
The two purportedly plan to begin manufacturing an autonomous Apple electric car as of 2024. This kind of adoption should lead to much-improved 5G infrastructure, which could support vehicle connectivity. As 5G and the Internet of Things (IoT) continue their growth, vehicles are becoming more and more connected. And with about two-thirds of people saying they would rather drive than ride in an autonomous car, much of the near-term focus is on trucking.
- This shift is driven by the growing need for more efficient power management in electric vehicles, resulting in smarter and more streamlined EV designs.
- The automotive regenerative braking market is expected to reach USD 13.83 billion by 2029, growing at a CAGR of 15.8%.
- Cleaner production methods reduce operating costs and free resources for reinvestment in new technologies.
- Additionally, the startup offers plug-and-play solutions that simplify deployment in safety-critical applications such as EV fast charging and sensor integration.
- Key players like Bosch, Continental AG, and ZF Friedrichshafen AG are investing in technological advancements.
- Regardless, with the continued global slowdown of EV adoption, we can also expect original equipment manufacturers (OEMs) to follow suit, with a decrease in the level of production, especially in the West.
- Innovations like solid-state batteries are set to revolutionise manufacturing priorities and reshape the EV supply chain.
Subsidies and incentives for EVs are also under scrutiny, with plans to reconsider or eliminate government-imposed market advantages that favour them. Crucially, the order halts federal funding for EV infrastructure projects, such as charging station programs, until they align with the administration’s policy goals. Additionally, looking at supply chains, AI and machine learning are driving the rise of autonomous logistics systems that can self-optimise routing, scheduling, and inventory management. These systems aim to minimise human intervention, improve decision-making, and enhance overall efficiency, paving the way for smarter supply chain operations. 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. The Latin America Energy Organisation (Olade), released a report showing that with the increase in supply, lower prices and tax incentives, Latin America and the Caribbean have great potential for EV growth.
Increased government focus on charging networks will be needed to support the expanding EV fleet. The autonomous vehicle sector will advance as UN regulators lift their speed limit. In the United States, the newly appointed administration has issued several executive orders that will likely have drastic impacts on both global and national automotive markets. One such order significantly impacts the future of EVs and EV infrastructure by rolling back policies that once supported their growth. It eliminates mandates that favour EVs, emphasising consumer choice and opposing regulations that make gasoline-powered vehicles less accessible.
Hydrogen May Fuel the Future of the Automotive Industry
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 online car shoppers rely on history will emerge worldwide in 2025 due to their faster recharge, extended range, and zero emissions.
Also, applications extend from adaptive cruise control, lane-keeping, and traffic jam assistance to robotaxis and driverless trucking. Advanced cameras paired with computer vision enable vehicles to classify road users, read signs, and recognize traffic signals, directly supporting ADAS and autonomous navigation. Silicon carbide (SiC) semiconductors improve energy efficiency in high-voltage EV systems by reducing losses and enhancing thermal management. Moreover, Asia-Pacific leads the automotive semiconductor market with a 45% global share. In Europe, the EU’s Chips Act aims to raise the bloc’s share of global chip production from under 10% to about 20% by 2030.
Some countries (and California) have even committed to phasing out all new sales of combustion engine vehicles over the next few decades. Even with this rapid growth, EV’s share of cars on the road is expected to remain at just 8% by 2030. If you want to learn more about 10 of the most important auto industry trends for the next months, read on. The specialty equipment industry recognizes the potential in off-road products and accessories, mainly for pickups and SUVs such as the Jeep Wrangler. More than half of pickup owners purchase off-road parts and engage in outdoor activities with their vehicles. Overlanding, a newer trend, combines off-roading with remote travel and camping, with products like mounted tents falling under this category.
Still not the EV revolution once thought but still plenty of growth
The startup employs the Perceived Quality Index to eliminate engineering bias by translating customer insights into measurable quality improvements. Cost savings also play a role, as recycled aluminum or bioplastics often return their investment in just over a year. Investors support companies with strong sustainability commitments, channeling funding toward greener production.
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Top 10 Automotive Industry Trends in 2025
This article dives into the company’s ambitious production targets, including the development of Gigafactory Mexico and its innovative approaches to battery cell technology. By streamlining its supply chain through vertical integration, Tesla is raising the bar for EV production efficiency and sustainability. As 2024 comes to a close, the automotive manufacturing industry continues to accelerate its transformation. From groundbreaking advancements in EV battery technologies to bold steps toward sustainable production, this year has marked a pivotal shift in how vehicles are designed, built, and powered.
- Global passenger EV sales grew 60% from 6.5 million units in 2021 to 10.5 million in 2022.
- The kit maintains original vehicle features to ensure a seamless transition and familiar driving experience.
- The AV industry itself is just in its infancy, as there are only 17,000 self-driving cars on the road in the US today.
- IoT, AI, and digital twins are becoming essential tools for improving efficiency, reducing downtime, and optimizing production processes.
- Semiconductors enhance safety by enabling faster decisions and reducing accident risks.
Launching of fuel cell EVs
Personalising the IVX 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.
How is the automotive industry adapting to the shift towards electric vehicles?
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.
Transportation
Looking ahead, JLR’s focus on carbon-neutral manufacturing and environmentally responsible practices sets a powerful example for the industry. The answer lies in education, infrastructure, and trust-building—slow but steady wins the race. The software integrates a one-shot multitask network capable of performing 2D detection, semantic segmentation, and monocular depth estimation.
How is technology improving the auto industry?
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.
- Cox Automotive Industry Insights predicted total new-vehicle sales in 2022 of only 14.4 million units, a number that doesn’t even surpass 2020 sales volume.
- Along with an increase in refueling stations, look to see an increase in the variety of FCEVs available to consumers in the coming years.
- Further, as part of larger decarbonization efforts, the Intergovernmental Panel on Climate Change (IPCC) emphasizes the contribution of EVs to the reduction of greenhouse gas emissions.
- These are the old and traditional methods that buyers use to contact dealers or check your products or information about the brand on search engines.
- The automotive industry is highly dynamic, and trends are subject to change over time.
- These advanced technologies are widely used across a great number of industries and the automotive domain is no exception.
- However, growth EV adoption is predicted to slow, with year-on-year growth falling from 15% in 2024 to 11% in 2025.
Autonomous Vehicles (Self-Driving Cars)
Swedish startup Radar Reticence designs radar sensors that advance sensor fusion capabilities in the automotive industry. Its technology applies signal processing algorithms to eliminate interference and ensure radar units operate reliably within the same environment. In parallel, the startup offers carAISuite, an AI-driven tool that automates engineering and compliance activities. It enables systematic results in cybersecurity, functional safety, and process conformance. In addition, the startup strengthens automotive cybersecurity with features such as real-time intrusion detection and automated containment protocols.
Consumer Health in Brazil
Such advancements align with global trends favoring autonomous fleet deployment in urban areas, positioning automakers to meet future demand for self-driving capabilities. Most consumers today are much more concerned with what the in-cabin experience is going to be, than the size and power of the engine. Global economic slowdowns and fierce competition from Chinese manufacturers have slowed the growth of EVs. In 2025, the automotive industry’s digital marketing spending is predicted to keep growing.
Radar Reticence designs Radar Sensors
Hydrogen-powered vehicles produce only water vapor as a byproduct, making them a strong contender for sectors that are harder to electrify, such as long-haul trucking and commercial transportation. This move highlights the industry’s broader trend of building resilient supply chains to safeguard against geopolitical and economic uncertainties. Global supply chain disruptions over recent years have prompted manufacturers to rethink strategies.
💻 Trend 2: The Rise of Software-Defined Vehicles (SDVs) – Cars as Computers
This ensures cybersecurity and reliability for engine control, powertrain management, and other mission-critical automotive applications. Further, Chipv creates power control chips equipped with triple RISC-V cores, extensive on-chip memory, and robust hardware security modules. In the US, the CHIPS and Science Act allocates USD 52.7 billion in funding and offers a 25% investment tax credit.
- 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.
- Due to these advancements, the global automotive IoT market is anticipated to reach USD 56 billion by 2026 at a CAGR of 19% during the period from 2021 to 2026.
- Volvo has adopted megacasting techniques to simplify EV production, reducing the number of components required and streamlining assembly processes.
- This article dives into the company’s ambitious production targets, including the development of Gigafactory Mexico and its innovative approaches to battery cell technology.
- 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.
- Artificial Intelligence and Smart Factory technologies are no longer aspirational but integral to modern automotive manufacturing.
- 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.
Rise in the Adoption of VR Tech
Consumer trends in the automotive industry highlight that short videos are more effective in converting leads into customers. Dealerships can take advantage of different video formats, like how-to videos, car highlights, and customer testimonials. With more and more customers prioritizing environmental sustainability, the focus should be on promoting environmentally conscious manufacturing processes along with eco-friendly cars like electric vehicles. The truck’s design removes the internal combustion engine, advancing commercial vehicle safety standards, and protecting pedestrians and other road users. Volta Trucks also offers leasing or purchasing options, and integrates services like maintenance, charging infrastructure, and training through its truck-as-a-service model. This simplifies the transition to electric vehicles for fleets, reducing environmental impact and promoting safer urban transport.
The foundation of autonomous vehicle architecture lies in a set of sensors, including LiDAR, radar, and ultrasonic systems, providing cars with a 360-degree panoramic view. These sensors measure distances, identify obstructions, and capture crucial traffic and road condition data. When paired with high-resolution cameras, these tools allow self-driving cars to identify objects, lane markers, and even pedestrians with unprecedented precision. While full autonomy is still on the horizon, advanced driver assistance systems (ADAS) are already transforming how we drive.
RevitsOne provides AI-based Fleet Management
The two purportedly plan to begin manufacturing an autonomous Apple electric car as of 2024. This kind of adoption should lead to much-improved 5G infrastructure, which could support vehicle connectivity. As 5G and the Internet of Things (IoT) continue their growth, vehicles are becoming more and more connected. And with about two-thirds of people saying they would rather drive than ride in an autonomous car, much of the near-term focus is on trucking.
- This shift is driven by the growing need for more efficient power management in electric vehicles, resulting in smarter and more streamlined EV designs.
- The automotive regenerative braking market is expected to reach USD 13.83 billion by 2029, growing at a CAGR of 15.8%.
- Cleaner production methods reduce operating costs and free resources for reinvestment in new technologies.
- Additionally, the startup offers plug-and-play solutions that simplify deployment in safety-critical applications such as EV fast charging and sensor integration.
- Key players like Bosch, Continental AG, and ZF Friedrichshafen AG are investing in technological advancements.
- Regardless, with the continued global slowdown of EV adoption, we can also expect original equipment manufacturers (OEMs) to follow suit, with a decrease in the level of production, especially in the West.
- Innovations like solid-state batteries are set to revolutionise manufacturing priorities and reshape the EV supply chain.
Subsidies and incentives for EVs are also under scrutiny, with plans to reconsider or eliminate government-imposed market advantages that favour them. Crucially, the order halts federal funding for EV infrastructure projects, such as charging station programs, until they align with the administration’s policy goals. Additionally, looking at supply chains, AI and machine learning are driving the rise of autonomous logistics systems that can self-optimise routing, scheduling, and inventory management. These systems aim to minimise human intervention, improve decision-making, and enhance overall efficiency, paving the way for smarter supply chain operations. 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. The Latin America Energy Organisation (Olade), released a report showing that with the increase in supply, lower prices and tax incentives, Latin America and the Caribbean have great potential for EV growth.
Increased government focus on charging networks will be needed to support the expanding EV fleet. The autonomous vehicle sector will advance as UN regulators lift their speed limit. In the United States, the newly appointed administration has issued several executive orders that will likely have drastic impacts on both global and national automotive markets. One such order significantly impacts the future of EVs and EV infrastructure by rolling back policies that once supported their growth. It eliminates mandates that favour EVs, emphasising consumer choice and opposing regulations that make gasoline-powered vehicles less accessible.
Hydrogen May Fuel the Future of the Automotive Industry
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 online car shoppers rely on history will emerge worldwide in 2025 due to their faster recharge, extended range, and zero emissions.
Also, applications extend from adaptive cruise control, lane-keeping, and traffic jam assistance to robotaxis and driverless trucking. Advanced cameras paired with computer vision enable vehicles to classify road users, read signs, and recognize traffic signals, directly supporting ADAS and autonomous navigation. Silicon carbide (SiC) semiconductors improve energy efficiency in high-voltage EV systems by reducing losses and enhancing thermal management. Moreover, Asia-Pacific leads the automotive semiconductor market with a 45% global share. In Europe, the EU’s Chips Act aims to raise the bloc’s share of global chip production from under 10% to about 20% by 2030.
Some countries (and California) have even committed to phasing out all new sales of combustion engine vehicles over the next few decades. Even with this rapid growth, EV’s share of cars on the road is expected to remain at just 8% by 2030. If you want to learn more about 10 of the most important auto industry trends for the next months, read on. The specialty equipment industry recognizes the potential in off-road products and accessories, mainly for pickups and SUVs such as the Jeep Wrangler. More than half of pickup owners purchase off-road parts and engage in outdoor activities with their vehicles. Overlanding, a newer trend, combines off-roading with remote travel and camping, with products like mounted tents falling under this category.
Still not the EV revolution once thought but still plenty of growth
The startup employs the Perceived Quality Index to eliminate engineering bias by translating customer insights into measurable quality improvements. Cost savings also play a role, as recycled aluminum or bioplastics often return their investment in just over a year. Investors support companies with strong sustainability commitments, channeling funding toward greener production.