Automotive trends in 2025 impacting middle-market organisations RSM Global

By 2025, we could see a broader adoption of fuel cell vehicles, especially in regions like Europe and Asia, where hydrogen infrastructure is beginning to grow. Environmental consciousness is driving the automotive industry toward more sustainable and eco-friendly solutions. Manufacturers are prioritizing robust security measures to protect sensitive consumer data and prevent malicious interference. From encrypted communications to intrusion detection systems, cybersecurity advancements will ensure consumer trust as vehicles become smarter and more networked. The rise of such technologies reflects consumer demand for vehicles that are not just transportation tools but extensions of their digital ecosystems.

Chip shortages remain a major thorn in automotive’s side

• These systems aim to minimise human intervention, improve decision-making, and enhance overall efficiency, paving the way for smarter supply chain operations.
• Meanwhile, environmental concerns will drive automakers to focus on sustainable manufacturing processes, alternative fuels, and circular economy principles.
• Quantum computing accelerates material discovery and crash simulation, and edge computing and 5G offer real-time responsiveness in vehicles.
• 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.
• From energy-efficient factories to green hydrogen applications, the examples showcased highlight the industry’s shift toward greener production methods.
• Major automotive manufacturers are responding by rethinking their revenue models and investing heavily in on-demand vehicle access services.
• The demand is highest for vehicles under four years old, which have the latest technologies but are less expensive than new cars.

As of the end of 2023, over 1 billion miles have been driven with Tesla Autopilot enables. As a result of this partnership, Ford is expected to launch its own self-driving car business. The standard ranges from SAE Level 0 (no automation) to SAE Level 5 (full automation). The Society of Automotive Engineers (SAE) “Levels of Driving Automation” standard shows how stages of vehicle automation progress. In China, it was even reported that lithium-ion battery pack prices fell below $100/kWh for the first time.

• Demand is rising, especially for power electronics, battery management systems, and more energy-efficient chips.
• As technology progresses, expect these trends to influence every facet of the automotive sector.
• This is not just a European problem with Volkswagen and Stellantis, as Honda and Nissan merge, and Ford and General Motors struggle.
• As climate change concerns intensify, automakers are increasingly pressured to reduce emissions, lower their environmental footprint, and embrace green technologies.
• China’s automotive sector underwent substantial changes, with battery electric vehicle (BEV) sales reaching 582,813 units in August 2024—a 20.8% increase from the previous month.
• However, the share of cars that are electric (hybrid and full electric) continues to rise.
• This process enables us to identify the most impactful and innovative trends in the automobile industry.

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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. These tools equip dealerships to handle inquiries efficiently, thus freeing time for other important tasks.

Top 10 Global Automotive Industry Trends in 2025

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. Automakers and technology companies are forming partnerships due to vehicles’ constantly evolving tech requirements.

Q) What are the predictions for the automotive industry?

Many auto manufacturers are considering integrating in-car payments to ease refueling, paying for parking or tolls, and even grocery shopping. Autonomous driving technologies like AD and ADAS are only possible to implement with the adoption of AI. Driver assistance technology, in particular, can go as far as detecting driver fatigue by monitoring their eyes and taking measures to avoid car accidents. The systems that come together to implement such technologies are sensor fusion, computer vision, and real-time decisions to enable the vehicle to take all complex traffic scenarios easily. 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 chip shortage is proving to be costly for the industry with many auto manufacturers shutting down plants due to low supply.
• When it comes to the benefits of connected cars, it seems that drivers are more willing to allow for data collection, too.
• Advanced cameras paired with computer vision enable vehicles to classify road users, read signs, and recognize traffic signals, directly supporting ADAS and autonomous navigation.
• The U.S. National Highway Traffic Safety Administration (NHTSA) plans to require automatic emergency braking (AEB) systems in all new light-duty vehicles by 2026.
• By 2025, we could see a broader adoption of fuel cell vehicles, especially in regions like Europe and Asia, where hydrogen infrastructure is beginning to grow.
• However, the primary function of these cars is not just to entertain they can connect to other vehicles (V2V), pedestrians (V2P), infrastructure (V2I), and cloud (V2C).
• Automotive suppliers are renegotiating their vendor/supplier contracts to align with these new predictions.
• According to a study completed by INRIX Transportation, Honolulu, New Orleans, and Nashville are the three US cities that stand to gain the most from micromobility vehicles.
• 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.

Digital Twins and Simulation technologies take centre-stage

These pods use AI and machine learning algorithms for real-time perception and adaptive decision-making. The startup’s technology allows these pods to adapt across industries, enhancing efficiency and safety in transporting people and goods. Singaporean startup EVIE Autonomous designs electric, autonomous shuttles for last-mile delivery, passenger transport, agriculture, and cargo movement. Its product range includes an electric modular chassis, the standard autonomous shuttle pod, and pods for other applications.

Automotive Events Worldwide

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. 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. With the growing popularity of bidirectional charging (V2G) technology, EVs now contribute energy to the grid to improve stability. By focusing on digital transformation, the company aims to integrate predictive analytics and process automation, creating production systems that are adaptable and resilient. These examples point to AI enabling real-time decision-making and predictive maintenance, while improving quality control and minimising downtime, marking the technology ‘a no-brainer’ for production in 2025.

It also supports this process by integrating buybacks, residual value calculations, and automated stock analysis. The automotive industry is one of the most severely affected by supply chain disruptions. Currently, its greatest challenge is uncertainty and instability, which are expected to persist this year. Hybrid vehicles are becoming increasingly popular—they combine electric power with the reliability of a combustion engine. Compared to EVs, they don’t require charging, but at the same time reduce carbon emissions.

It also provides lane-change algorithms that ensure comfortable lateral movement and personalized passenger comfort profiles refined with each journey. The World Health Organization links 1.35 million annual deaths to road accidents, creating urgency for autonomy. AI, ML, and computing allow vehicles to process data points per second with split-second precision. This ensures cybersecurity and reliability for engine control, powertrain management, and other mission-critical automotive applications.

What is the future of the automotive industry?

In 2025, the automotive industry’s digital marketing spending is predicted to keep growing. This rise in digital advertising spending is being steered by the growing usage of social media. Dealerships need to integrate strategic frameworks to capture potential buyers across different stages in the process with the use of social media marketing, click-to-call conversions, and messaging apps. The efficiency of electric power fused with the reliability of traditional engines has contributed to the rise of hybrid vehicles. Hybrid vehicles present the perfect compromise of lower emissions and enhanced fuel economy without the need for charging. In 2024, hybrids saw a YoY growth of almost 19%, which is expected to grow to over 23% by 2025.

SafeAD enables Large-scale Fleet Learning

AI and ML solutions process multimodal sensor data to power autonomy, predictive maintenance, and personalization. For instance, Qualcomm states that C-V2X allows vehicles to communicate with other vehicles, with infrastructure (V2I), and with vulnerable road users. Software-defined vehicles (SDVs) convert the auto industry by shifting control from hardware to software. Automakers move from fleets of electronic control units (ECUs) toward centralized computing platforms that run multiple domains on Systems on Chip (SoCs). Vehicle subscriptions reduce financial barriers for consumers and offer bundled insurance, maintenance, and roadside assistance in predictable monthly fees.

This regulatory advancement, combined with growing environmental awareness, is accelerating the shift towards electric mobility. Canadian startup Aadhya Navik designs software solutions that improve safety, comfort, and traffic efficiency in autonomous driving. Its vehicle control system processes passenger comfort thresholds related to acceleration, deceleration, and jerk rate. It then adjusts driving decisions to minimize motion sickness and maintain learn what a license plate can tell you smooth operation.

Toyota Launches the Urban Cruiser EV—Just Not Here

The integration of Industry 4.0 technologies is revolutionizing automotive manufacturing. IoT, AI, and digital twins are becoming essential tools for improving efficiency, reducing downtime, and optimizing production processes. 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 autonomous driving. These shifts are beneficial to ARM, STMicroelectronics, NXP Semiconductors and Infineon Technologies.

• The parts industry is benefiting from the ever-increasing average age of vehicles on the road.
• Right now, there are only about 73,215 public EV charging stations across the US.
• Autonomous tech will likely be bundled with subscription services, reshaping mobility economics.
• Autonomous vehicles are reshaping mobility, from AI‑powered perception to intelligent infrastructure and generative simulation.
• The startup’s vehicle management system provides insights into speed, running vitals, and health information.
• Miniaturization trends in automotive electronics enable the integration of multiple sensors into compact systems to improve vehicle performance while reducing costs.

Further, it establishes local manufacturing facilities, which reduce supply chain dependency and generate employment and stimulate economic growth. 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.

Supply chains are being restructured to secure critical minerals and diversify chip sources. The industry is also innovating in battery chemistry, thermal management, and vehicle-to-grid (V2G) tech to improve EV usability. As we progress through 2025, these trends will continue to reshape the automotive landscape. Success will depend on manufacturers’ ability to balance technological advancement with practical implementation while meeting evolving consumer expectations. The transformation of the automotive sector is far from complete, but the direction is clear – towards a more sustainable, connected and intelligent future of mobility. Traditional internal combustion engine (ICE) vehicles are steadily losing ground as governments worldwide implement stricter regulations, including the EU’s upcoming ban on new ICE vehicle sales by 2035.

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.

CARNIQ Technologies specializes in Car Security & Compliance

The startup also offers META, a compact shuttle for urban mobility; and SPACE for passenger transportation. These vehicles use a re-assembly factory model, which allows upgrades and updates to extend their lifecycle. Moreover, lightweight and bio-based materials are used to reduce vehicle weight and improve fuel efficiency, which aligns with sustainability goals.

• Every year brings with it new shifts in technology, consumer behaviour, and market dynamics, all of which shape and build automotive as a cornerstone industry of the world.
• Technology in automotive industry forges ahead—the latest technological advancements are more and more extensively used by the domain.
• Software-defined vehicle (SDV) architectures are revolutionising automotive technology, with electric models often leading this digital transformation.
• The modernized vehicles available in the market have opened an opportunity for the firms that supply and also manufacture the parts.
• ABB is investing in advanced software that simulates automotive painting processes, cutting costs by up to 30%.
• Expect more biodegradable components, renewable energy-powered factories, and battery recycling programs.
• The Starkenn Brake Safe, a collision mitigation system features automatic emergency braking in critical scenarios.

In 2022, the automotive industry’s automotive digital marketing spending increased to $17 billion and is predicted to keep growing in 2025. Experts anticipate a rise in digital advertising spending, driven by the growing mobile and social media usage rates. 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.

The evolution of self-driving and connected cars is simplifying driver-vehicle interaction. Human-machine interfaces (HMIs), including voice-based and haptic feedback systems, are expanding control over various car functions. For this in-depth research on the Top Automotive Industry Trends and startups, we analyzed a sample of 4859 innovative automotive startups & scaleups worldwide.

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.

ABB is investing in advanced software that simulates automotive painting processes, cutting costs by up to 30%. The simulations enhance precision and minimise waste in this energy-intensive stage of manufacturing. The integration of renewable energy into automotive production took centre stage in 2024. This article sheds light on how OEMs are embracing solar, wind, and hydrogen power to achieve sustainability goals. From energy-efficient factories to green hydrogen applications, the examples showcased highlight the industry’s shift toward greener production methods.

Automakers are responding by integrating carbon-neutral initiatives across their value chains. This includes upstream supply chains and downstream life cycle phases like recycling. Moreover, Asia-Pacific is the fastest-growing region, with a projected CAGR of 14.8%. This is fueled by increased vehicle production and sales in China, Japan, and South Korea.

Brands provide specific offers by analyzing your needs, preferences, and behavior. Paul Marinelli gets straight to the point—exploring key trends and innovations shaping tomorrow’s mobility in just five minutes. Long journeys are no longer exhausting and tedious, as everyone on board can watch movies, stream their favorite music, and play games through pre-loaded entertainment services. These cars even come equipped with Wi-Fi hotspots, ensuring easy Internet access for all passengers.