News & Insights Latest Automotive Trends and Industry Updates
Investors support companies with strong sustainability commitments, channeling funding toward greener production. The Global Startup Heat Map showcases the distribution of 3836 exemplary startups and scaleups analyzed using the StartUs Insights Discovery Platform. It highlights high startup activity in Western Europe and the USA, followed by India. Unless otherwise noted, this page’s content was written […]
Investors support companies with strong sustainability commitments, channeling funding toward greener production. The Global Startup Heat Map showcases the distribution of 3836 exemplary startups and scaleups analyzed using the StartUs Insights Discovery Platform. It highlights high startup activity in Western Europe and the USA, followed by India. Unless otherwise noted, this page’s content was written by either an employee or a paid contractor of Semrush Inc.
What technology is used in the automotive industry?
- Its RC ONE driverless vehicle combines proprietary software and hardware with automotive-grade components to achieve low-speed autonomous operation.
- Automotive Manufacturing Solutions (AMS) is the essential resource for automotive manufacturing professionals and suppliers globally.
- In 2025, a great number of car manufacturers are planning to improve their infotainment systems providing them with more and more advanced capabilities.
- The market for micromobility sat at $40 billion in 2020 and is expected to grow to $195 billion by 2030.
- It won’t take too long for the CASE to accelerate the transition of the automotive industry from the way it has been working for hundreds of years.
- These technologies enhance safety, efficiency, and user experience across vehicles.
Canadian startup Xaba develops intelligent automation solutions, materials, and processes for sustainable manufacturing. Its AI-driven control systems, xCognition and xTrude, enhance industrial robotics and additive manufacturing by automating programming and improving precision. US-based startup Aviva Links builds in-vehicle connectivity solutions that include multi-gigabit Ethernet and ASA Motion Link (ASA-ML) semiconductor products for ADAS systems.
- Similarly, hardware security modules (HSMs) protect encryption keys and authenticate critical functions, with secure microcontrollers embedded into electronic control units (ECUs).
- Senegal-based startup Kemet Automotive manufactures all-terrain electric vehicles (EVs) designed for the road conditions.
- EV sales grew from less than 1% of total vehicle sales a decade ago to more than 4% today.
- Data-driven connectivity services and on-demand mobility will add up to $1.5 trillion to the automotive revenue pool by the year 2030.
- Its RISC-V IP processors adopt 32/64-bit architectures supported by a nine-stage dual-issue pipeline.
- Connected cars are vehicles that use wireless means to connect to the Internet of Things.
- Semiconductor experts say manufacturers won’t see a return on investment if they build new foundries to meet the auto industry’s demand.
- Environmental consciousness is driving the automotive industry toward more sustainable and eco-friendly solutions.
Demand is rising, especially for power electronics, battery management systems, and more energy-efficient chips. Also, MotionSafe protects the auto industry by securing vehicle data, supporting supply chains, and ensuring a safe transition to connected mobility. South African startup Motomatix applies AI and custom software solutions to strengthen supply use VIN history before negotiating resale chain resilience in the automotive repair sector. Supply chain resilience and nearshoring strengthen operational stability, while vehicle cybersecurity ensures trust in connected ecosystems.
Automotive Industry Trends 2025: Shifting Gears Toward Innovation
- Prices are expected to decrease as supply-chain issues improve, and sales continue to soften.
- Self-driving taxis are already available in parts of China and several US cities.
- “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.
- LiDAR provides high-resolution 3D mapping that allows vehicles to detect road geometry, obstacles, and pedestrians with centimeter-level accuracy.
- Let’s have a closer look at the top automotive trends poised to dominate the landscape in 2025.
- Australian startup V2Grid designs V2G technology that converts EVs into mobile energy resources for homes, businesses, and the national grid.
- The region’s substantial market share results from government incentives and the growth of the automobile industry.
Usage-based insurance (UBI) models use driving behavior data to provide customized premiums and are gaining popularity. From 2024 to 2029, the insurance telematics industry is projected to grow at a CAGR of 17.6%. Telematics adoption in logistics and transportation industries is driven by features such as real-time tracking, driver behavior analysis, and fuel consumption reduction. Join us today and access AMS’s wealth of global news, insights, intelligence and content, and to make valuable connections with your peers from across the automotive industry. Volkswagen is using digital twin technology at its Wolfsburg plant to simulate and optimise production processes for the Tayron SUV.
Electrification to grow despite various hurdles
The U.S. and China trade war has also influenced the search for alternative sourcing options. Labor costs are another factor in the rise of local sourcing, with countries such as Taiwan, Cambodia, and Laos providing a lower-cost labor alternative to China. Given the opportunity to significantly disrupt private transport and shape the future of the automotive industry, companies are expected to continue investing in autonomous vehicles in 2025. At the same time, a limited EV infrastructure and uneven policy application dampen the pace of meaningful progress throughout the region.
- While most of these concerns can be overcome, it will take some time, and this time will be the most challenging for the industry.
- Whilst the U.S. may be bucking it, there is certainly a global trend towards a more sustainability-forward manufacturing scene.
- The strides made in EV battery innovation, renewable energy adoption, and sustainability are paving the way for a more resilient and forward-thinking industry.
- While fully autonomous vehicles have the potential to revolutionise how society moves from A to B, the industry is taking a more measured approach to implementation.
- Luxury car brands are experiencing growth due to increased tangible luxury offerings and rising disposable incomes.
- Connected cars create new revenue streams via subscription services, data monetization, and personalized experiences.
- The adoption of pre-owned luxury cars is increasing due to easy access to financing and lower entry prices.
- Moreover, economic efficiency improves adoption, as autonomous vehicles reduce transport costs by up to 40% and maximize logistics utilization.
Self-driving to gain traction, but semi-autonomous cars will reign
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. US-based startup FlxTran develops a new transportation system using self-driving vehicles on abandoned railroad tracks to provide fast regional transport to connect smaller communities. The system uses an app to schedule rides on autonomous vehicles, cutting down trip times compared to the available commuting options.
- In the Automotive Innovation Map below, you get a comprehensive overview of the innovation trends & startups that impact your company.
- The startup also serves other industries, such as aerospace, construction, and biomedical.
- UK-based startup Distributed Additive Manufacturing (DAM) offers 3D printing services including design, building, and finishing of parts.
- The main issue holding back the popularity of these vehicles is a lack of hydrogen fueling stations.
- Moreover, car connectivity transforms the driving experience by integrating with real-time systems and smart gadgets.
What impact will 5G connectivity have on the automotive industry and its trends?
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. GenAI offers potential for advanced applications like predictive maintenance, where AI could assist in analyzing vehicle data and forecast potential failures before they occur. This would mark a critical shift toward an era of personalized vehicle recommendations and optimized repair services. By addressing issues proactively, manufacturers and service providers can further reduce breakdowns, enhance vehicle reliability, and improve overall customer satisfaction. A simple yet impactful example would be the replacement of vehicle manuals with voice-activated AI assistants.
What role does autonomous driving play in current automotive trends?
AI is also transforming automotive manufacturing by speeding up production and cutting costs. In 2024, the automotive industry experienced significant transformations, with advancements in electric vehicles (EVs), autonomous driving technologies, and shifts in global markets. Moreover, high-performance computing platforms supply the processing power needed to run these systems in real time.
Mechatnom applies Automotive Software Modules
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. Toyota intends to power its battery plant in North Carolina with renewable energy by 2025. Its early fusion approach integrates LiDAR and radar data, while neural networks infer road elements and topology to create accurate high-definition maps. Continuous change detection triggers automatic cloud updates to ensure up-to-date navigation information. South Korean startup BOS Semiconductors builds Eagle-N, an AI accelerator for in-vehicle infotainment (IVI) and ADAS.
Hydrogen May Fuel the Future of the Automotive Industry
Autonomous driving will continue progressing from Level 2+ driver-assist to Level 3 conditional autonomy in geo-fenced areas. Full Level 4 and 5 autonomy remain years away due to regulatory, ethical, and technical challenges. Expect more robotaxi pilots, fleet autonomy, and advanced safety features integrated into mainstream cars. The focus will also be on cybersecurity and fail-safe systems to build consumer trust.
b. Charging Infrastructure Expansion
What initially appeared to be a niche sector is now the foundation of the auto industry’s transition. While automakers spend billions developing electric cars, most governments worldwide have ambitious plans to phase out internal combustion engines. According to Statista’s report, global sales of electric vehicles are expected to reach an astounding US$786.2 billion by the end of 2024. The concept of Mobility as a Service (MaaS) is changing how people think about transportation. 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.
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.
Reports from key manufacturing shows
Regenerative braking systems, crucial in EVs and hybrid cars (HEVs and PHEVs), contribute to energy recovery rates of 5% to 20%, depending on driving conditions. The platform includes geofencing, driver behavior monitoring, route mapping, and integrated or standalone camera options, accessible via a dashboard and mobile app. For asset tracking, the startup provides small, discrete devices with long-life batteries lasting up to five years, waterproof ratings, and location monitoring alerts for reliability in outdoor conditions. XCognition captures operator input or sensor data to generate execution-ready robotic programs to increase accuracy and reduce deployment time. XTrude models the physics of FDM processes to optimize parameters like flow rate and extrusion temperature to ensure large-scale 3D printing.
Vehicle-to-Everything (V2X): V2X Prevents 80% of Non-impaired Driver Crashes
Without subsidies, demand for EVs on the consumer end could also drastically decrease as was recently seen in Germany after government incentives ended. This may also see American automakers finding more challenges in exporting vehicles to regions in which regulations are more stringent. The market share with EVs specifically is even greater, manufacturing 58% of the world’s electric vehicles.
Qumasoft automates Automotive Cybersecurity Management
The uptake in EVs is experiencing a surge, driven by rapid advances in battery technology, an expanding charging infrastructure and supportive government incentives. As more manufacturers roll out affordable and appealing EV models, the market is shifting towards sustainable alternatives which are becoming more accessible to a broader consumer base. One of the most in-demand connectivity solutions is in-vehicle infotainment—the systems that provide both information and entertainment for enhanced driving experience. The currently available infotainment systems can connect with smartphones, sensors, ADAS (advanced driver assistance systems) as well as other in-vehicle and external systems. In 2025, a great number of car manufacturers are planning to improve their infotainment systems providing them with more and more advanced capabilities. Vehicle connectivity has become a really game-changing innovation in automotive industry that will transform the future of driving.
The goal is to enable cars to make decisions and navigate without human intervention. In 2025, automakers will continue improving AI systems’ reliability, reducing the likelihood of accidents, and enabling safer autonomous driving experiences. 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.
🌐 Trend 4: Global Supply Chain Resilience and Geopolitical Shifts
Cost efficiency strengthens the case, with Mexico offering a 35% landed-cost edge over China in 2022. And it is projected to widen to 45% by 2030 due to lower labor and freight costs. The startup enables automakers to reduce waste, optimize design processes, and advance sustainable manufacturing strategies.
Read on to explore each trend in depth – uncover key drivers, current market stats, cutting-edge innovations, and the 20 leading innovators shaping the future. 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. Sales of the most expensive cars are predicted to drive the most market growth through 2031.
