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. In the Electric Vehicle Market, 2025 Will Be the Year of More – More Models, More Incentives, More Discounting, More Advertising, and More Sales Muscle.

The chip shortage is proving to be costly for the industry with many auto manufacturers shutting down plants due to low supply. The global automotive parts market has been steadily growing for the past twenty years. Increasing battery efficiency as well as EV charging infrastructure can speed up adoption. As climate change concerns intensify, automakers are increasingly pressured to reduce emissions, lower their environmental footprint, and embrace green technologies. Digital twins—virtual replicas of physical systems—are gaining traction, enabling manufacturers to simulate scenarios and predict outcomes in real-time. Predictive maintenance powered by AI minimizes machine failures, while IoT networks provide detailed insights into factory operations.

• The vans deliver groceries from nearby stores and send out a push notification when the order arrives.
• Moreover, the startup’s marketplace connects professionals in a secure environment.
• Emerging companies are developing advanced sensing technologies to collect extensive vehicle data and enable vehicles to better understand their surroundings.
• The startup also offers META, a compact shuttle for urban mobility; and SPACE for passenger transportation.
• Trends span sustainable manufacturing, EV expansion, supply chain nearshoring, vehicle cybersecurity, automotive semiconductors, sensor fusion, autonomous driving, subscription models, SDVs, and V2X.
• Government incentives, environmental imperatives, technological advances, and shifting consumer preferences drive this expansion.
• 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.
• In 2023, the global connected car market was valued at $80.87 billion and projecting remarkable growth.

Digital Twins and Simulation technologies take centre-stage

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 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. Consumer trends in the automotive industry highlight that short videos are more effective in converting leads into customers.

• Automakers will continue to incorporate these systems into even more affordable models, making safety technologies more accessible to a broader range of consumers.
• Technology in automotive industry forges ahead—the latest technological advancements are more and more extensively used by the domain.
• They also incorporate floating-point units that improve computational accuracy and performance.
• Human-machine interfaces (HMIs), including voice-based and haptic feedback systems, are expanding control over various car functions.
• Maximising the ROI to investors and stakeholders while remaining competitive will be priorities of the 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. Figures from the last few years show that the EV adoption rate is still slow at a global level. However, the share of cars that are electric (hybrid and full electric) continues to rise. Also, despite the slowing adoption rate, data has shown that the number of electric and hybrid vehicles actually on the road has dramatically increased (from 26 million in 2022 to 40 million in 2023).

No Surprise: Q4 Auto Sales Fell, EVs Fell Further

This makes sense, as 83% of car customers already said they wish they could save time by shopping online. This number is expected to have risen in 2020 as dealers everywhere turned to digital channels. As of 2023, the two now equip Ford and Lincoln vehicles with a built-in Android operating system. In addition, TuSimple has partnered with Navistar and UPS to test its software under supervised driving conditions.

🚗 Subscription Models and Car-Sharing Services

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. 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.

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. Automotive industry trends refer to changes in patterns within the automotive sector that influence vehicle design, production, marketing, and usage. Technological advancements, changes in consumer preferences, regulatory changes, and global economic conditions drive these trends. The automotive industry is highly dynamic, and trends are subject to change over time. Monitoring and understanding these trends is crucial for automakers, suppliers, and other stakeholders to stay competitive.

Software-defined Vehicles (SDV): Market Set to Reach USD 3.3T by 2034

Explore the most important trade fairs and conferences to boost your business success. Contact Avenga today to learn more about what industry experts have to say about these trends. For instance, used car due diligence checklist China has introduced policies encouraging automakers to procure up to 25% of their chips domestically by 2025, reducing reliance on foreign suppliers. There will be continued demand for legacy process technology, with the construction and facilitation of the ESMC fab in Dresden progressing through 2025. Whether this central compute is a monolithic chip such as Nvidia Thor, which will be detailed in 2025, it will also be constructed from chiplets.

🔌 Trend 1: The Electric Revolution Accelerates – EVs Taking Charge

These all-inclusive options reduce the financial burdens of ownership, especially for urban users. Moreover, economic efficiency improves adoption, as autonomous vehicles reduce transport costs by up to 40% and maximize logistics utilization. Probably the most important trend in the automotive industry is the worldwide shift to electric vehicles (EVs). The emergence of CASE (Connected, Autonomous, Shared, and Electrified) technologies is changing the industry like never before. This will drive growth opportunities for automakers in the years to come and shape the automotive industry outlook in the future. Moreover, the growth of the automotive IoT market signals a strong trend toward connectivity.

Cube Intelligence builds Blockchains for Autonomous Vehicles

The US-based startup Procon Analytics leverages big data to offer a solution for automotive finance. The solution captures millions of data points in real time and analyzes them to enable lenders to instantly assess and reduce risk. This allows Buy Here Pay Here (BHPH) dealers to expand their businesses and extend credit to high-risk customers.

Toyota Launches the Urban Cruiser EV—Just Not Here

Cybersecurity protects these connected systems, while regenerative braking and sustainable manufacturing practices reduce the environmental impact. EVs drive the shift to greener mobility and it is aided by advancements in semiconductors for smarter and efficient vehicles. OEMs are investing billions in EV platforms, battery R&D, and charging infrastructure partnerships. Legacy brands like Ford, GM, and Volkswagen are launching dedicated EV lines, while startups like Rivian and Lucid push luxury and performance boundaries.

The rise of Chinese EV manufacturers

Perhaps the biggest shift here is in a new manufacturing landscape, with new decentralised hubs across the globe producing EVs for local markets. 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. 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. 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.

Information technology has become a crucial part of the recent trends in the automobile industry as priorities change over time. Market leaders are adjusting their strategies to align with current trends, further emphasizing the shift towards EV-only vehicles. Just days ago, Jaguar unveiled their new concept car, the Jaguar Type 00, a fully electric, futuristic vehicle that marks a departure from every other car the brand has produced.

Autonomous Vehicles (Self-Driving Cars)

Let’s have a closer look at the top automotive trends poised to dominate the landscape in 2025. Supplemented by the categorisation of our experts, a clear picture emerges of where the industry stands – and where it should develop in order to remain fit for the future. Automakers are also adopting hyper-personalized features to offer customized experiences through infotainment systems, user profiles, and real-time navigation updates. Many of these vehicles will feature over-the-air (OTA) upgrades and V2X communication. 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. Toyota intends to power its battery plant in North Carolina with renewable energy by 2025.

MotionSafe enables AI-powered Automotive Cybersecurity

A few hybrid models are priced below their EV and ICE counterparts, attracting Chinese consumers to hybrids, especially plug-in hybrid (PHEV) and extended-range hybrid (EREV) models. Further, its Craidlr ATX-G gateways are integral to the surface temperature & vibration monitoring solution, catering to diverse automotive testing needs. These gateways, combined with advanced transducers, facilitate real-time data collection. The Global Startup Heat Map below highlights the global distribution of the 4800+ exemplary startups & scaleups that we analyzed for this research. Created through the StartUs Insights Discovery Platform, the Heat Map reveals high startup activity in the US, Europe, and India.

Connected Vehicle Technologies

This is especially necessary for electric, connected, and autonomous vehicles, which require specialized software and advanced technology to function safely. Manufacturers are partnering with tech companies to design and produce the new operating systems necessary for the next generation of technologically advanced vehicles. Automakers and technology giants like Google and Tesla are incorporating more digital technology into their cars. The automotive industry stands at a thrilling crossroads, where innovation meets complexity and opportunity rides alongside challenge.

Automotive Industry and Market Trends

• By securing these systems, cybersecurity prevents hijacking of steering or braking functions, protects sensitive driver data, and shields automakers from costly recalls and reputational harm.
• By leveraging these factors, Statevolt is positioning itself to meet the rising demand for EV batteries in an increasingly competitive market.
• Also, EV charging infrastructure requires strong cybersecurity, as attackers target charging stations for data theft or service disruption.
• From electric vehicles zipping past gas guzzlers to cars that update themselves like your smartphone, the industry is in the middle of a revolution.
• 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.
• The software integrates a one-shot multitask network capable of performing 2D detection, semantic segmentation, and monocular depth estimation.
• Automakers and technology companies are forming partnerships due to vehicles’ constantly evolving tech requirements.
• Its MotionSafe Privacy platform uses algorithms to monitor controller area network (CAN) traffic and detect anomalies.
• Italian startup Moi combines thermosetting composite materials and 3D printing to manufacture high-performance parts for the automotive industry.

Connected cars are vehicles that use wireless means to connect to the Internet of Things. They offer a safe, comfortable, and convenient multimedia experience with on-demand features that allow users to browse the web while in their vehicle. 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. The technology has already processed over a billion customer requests and is set to grow in 2025 with predictive intelligence and maintenance technology. Conversely, in Europe, regulations are scaling up in preparation for the EU ban on new ICE vehicles by 2035. Chinese EV automakers’ expansion into new markets, including Europe, other Asian countries, and Latin America as previously mentioned, could see a completely new global EV landscape.

In addition, the IoT’s potential in the automotive industry presents a significant chance for manufacturers to revamp their marketing strategies. IoT solutions can offer numerous benefits to end-users by utilizing interconnected systems, such as better safety, driving assistance, and predictive maintenance. Collecting user data through these sensors creates ample opportunities for marketers to promote upselling.

Tesla’s EV battery production and global gigafactory network

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. The AI system answers the driver’s query by cross-referencing data from the car’s diagnostics. It instantly generates a detailed explanation of the issue along with potential solutions.

Software-Defined Vehicles (SDVs) will Witness High Demand

• Contact us today to make critical data-driven decisions, prompting accelerated business expansion and breakthrough performance.
• This growth is driven by the increasing adoption of electronic control units (ECUs) in modern vehicles and the rising implementation of advanced safety systems.
• This agreement is expected to drastically enhance automotive trade between these regions.
• In October 2022, the delivery lead time for chips decreased by six days to 25.5 weeks, the most significant drop since 2016.
• 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.
• However, there are yet to be more autonomous vehicles on the road due to the technological and safety challenges that must be overcome.
• As a result, vehicles become even more connected with each other and the infrastructure and provide drivers with more advanced opportunities.
• Avvenire focuses on sustainable mobility to contribute to a cleaner environment and meet the demand for green transportation.
• 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.

For instance, Qualcomm states that C-V2X allows vehicles to communicate with other vehicles, with infrastructure (V2I), and with vulnerable road users. TeraDAR strengthens sensor fusion by providing high-resolution, all-weather imaging that improves vehicle perception and increases safety. Moreover, the startup leverages patented research and extensive radar expertise to deliver dependable detection in densely populated settings. Radar Reticence strengthens sensor fusion by supplying interference-free radar data that enhances vehicle perception and improves safety.

• The road to 2025 is set to bring even more dynamic changes, with global collaborations, technological breakthroughs, and bold strategies defining the future of manufacturing.
• Self-driving vehicles are becoming increasingly common and will continue to do so in 2025.
• While efforts are underway from many different automakers to expand fabrication capacity, lead times for chip production remain long with little sign of a solution in the near future.
• As cities become more congested, shared mobility solutions are becoming increasingly popular.

Automotive Supply Chain Issues.

Sensor fusion that combines information from various sources improves safety and autonomy by enabling accurate decision-making. The Asia-Pacific region currently controls the majority of the market due to the strong uptake of electric cars (EVs) in countries like China, India, and Japan. The region’s substantial market share results from government incentives and the growth of the automobile industry. Indian startup ThinkSeed develops middleware solutions that enhance smartphone connectivity to vehicles for secure access and infotainment.