EV sales grew from less than 1% of total vehicle sales a decade ago to more than 4% today. Rapid technological and environmental innovations have forced incumbents to adapt to new challenges. The auto industry is one of the largest and most influential markets on the planet. Overall, Auto News suggests that analysts expect the chip shortage will result in a loss of 3 million in vehicle production in 2025.

• UK-based startup Distributed Additive Manufacturing (DAM) offers 3D printing services including design, building, and finishing of parts.
• The AI in Automotive industry in 2026 is evolving as AI, autonomous technologies, and software-defined vehicles reshape global mobility systems.
• By 2035, approximately 16% of all new LV (light vehicle) sales in the US are predicted to consist of advanced automated vehicles (L3, L4, and L5).
• Moreover, lightweight and bio-based materials are used to reduce vehicle weight and improve fuel efficiency, which aligns with sustainability goals.
• Exciting developments in energy storage and green hydrogen technologies promise to redefine production processes further.

🤔 Uncertain Market Acceptance and Consumer Adoption of New EV Tech

• In 2025, Uber and GM Cruise will partner, allowing users of the Uber ride-hailing platform to book fully self-driving vehicles from the app in selected US cities.
• The currently available infotainment systems can connect with smartphones, sensors, ADAS (advanced driver assistance systems) as well as other in-vehicle and external systems.
• The chip shortage is proving to be costly for the industry with many auto manufacturers shutting down plants due to low supply.
• By 2030, automotive industry trends 2030 will witness a significant shift towards electric and autonomous vehicles, driving sustainable growth in the car market.
• With a CAGR of 25.5% from 2025 to 2037, the global sensor fusion market is expected to reach USD 7.91 billion by 2025.
• The startup employs the Perceived Quality Index to eliminate engineering bias by translating customer insights into measurable quality improvements.
• It also provides lane-change algorithms that ensure comfortable lateral movement and personalized passenger comfort profiles refined with each journey.

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. Automakers and technology giants like Google and Tesla are incorporating more digital technology into their cars. Without subsidies, demand for EVs on the consumer end could also drastically decrease as was recently seen in Germany after government incentives ended.

Tree Map reveals the Impact of the Top 10 Auto Industry Trends

For example, Valeo, with its SCALA LiDAR, which scans the surroundings 25 times per second at ranges beyond 200 meters. Further, high-speed automotive Ethernet, 5G networks, and V2X communication extend a car’s perception beyond its line of sight. Gallium nitride (GaN) chips enable high-frequency switching, compact designs, and fast charging. Transparency rules such as the EU’s Corporate Sustainability Due Diligence Directive and the US Uyghur Forced Labor Act add pressure for stricter supplier oversight.

EVIE Autonomous produces Autonomous Shuttles

Vehicle cybersecurity drives one of the fastest-growing areas in the auto industry as connected vehicles multiply and cyber risks intensify. Analysts project the automotive cybersecurity market to increase from USD 5.24 billion in 2025 to approximately USD 18.88 billion by 2034, advancing at a CAGR of 15.3%. Geopolitical risks, regulatory frameworks, cost advantages, and compliance needs drive the auto industry toward supply chain resilience and nearshoring. Automakers reduce reliance on distant suppliers as trade tensions and conflicts expose the fragility of global networks. Also, advanced battery management systems improve safety, extend battery life, and optimize performance.

(c) 2025 Automotive Manufacturing Solutions

By 2025, the sector is expected to experience continued technological advances, heightened sustainability efforts, and shifting market dynamics. 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. One of the most significant shifts in the automotive industry is the widespread adoption of electric vehicles (EVs). The expected reach in 2026 is expected to reach nearly $62 billion at a growth of CAGR 22.75%.

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. Its technology transports ultra-high-bandwidth video and data from sensors to processors with ultra-low latency. For this, it uses advanced system-on-chips (SoCs) that integrate mixed-signal analog and digital signal processing (DSP) algorithms. The European Union’s Vehicle General Safety Regulation (GSR2), effective July 2024, mandates several ADAS features in new vehicles. 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.

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Despite initial scepticism, the automotive industry is embracing enhanced connectivity by enabling real-time updates and post-production feature additions. Through our work with automotive innovators, we witness first-hand how rapidly this sector is evolving. From electrification and software integration to new mobility models, the industry faces unprecedented change. 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.

• We hope this blog helps you understand the upcoming automotive industry trends in 2025.
• Additionally, customer data drives sales, optimizes supply chains and informs new vehicle designs.
• Learn why it matters more than organic traffic and how to improve your rankings and visibility.
• It also advances autonomous driving by enabling adaptability across vehicle types and conditions.
• Emerging companies are developing advanced sensing technologies to collect extensive vehicle data and enable vehicles to better understand their surroundings.
• It offers more sustainable 3D printing by developing its own large-scale printing hardware and using fully recycled composite materials.
• Similarly, Skoda has embraced AI to navigate the complexities of modern manufacturing.

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.

Electric vehicle trends in 2025

• 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.
• While traditional OEMs are adapting to this shift, we are also witnessing newer market entrants are making significant strides in implementation, which is making for a more competitive automotive sector.
• The vans deliver groceries from nearby stores and send out a push notification when the order arrives.
• Moreover, its NuPort solution extends reliability by enabling connections between automotive components that support both diagnostics and long-term endurance.
• 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.
• Automakers are also adopting hyper-personalized features to offer customized experiences through infotainment systems, user profiles, and real-time navigation updates.
• Moreover, Asia-Pacific is the fastest-growing region, with a projected CAGR of 14.8%.

Norwegian startup Chargerly designs vehicle-to-building (V2B) solutions that integrate EVs with building energy systems to improve resilience, efficiency, and sustainability. Automotive drivers now expect vehicles to behave like smartphones, gaining features through over-the-air (OTA) updates. Regulations also support adoption, as safety and emissions standards require continuous updates and smarter architectures. 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.

Automotive Technology and Engineering

Last year, the European Union updated the General Safety Regulation (GSR) and establishes mandatory safety requirements for cars sold in the EU. According to this regulation, starting from 2024, the following features become compulsory. However, there are yet to be more autonomous vehicles on the road due to the technological and safety challenges that must be overcome.

Advancements in ADAS and Autonomous Technologies

Despite this, 2025 is guaranteed to be pivotal, with potential breakthroughs in autonomous driving technology along with a stronger push toward hybridization and sustainability. Simultaneously, many automakers embrace vertical integration strategies, taking control of the software stack from chip development to application integration. This approach equips them to differentiate their offerings, with software being the key to creating compelling customer experiences.

Manufacturing

We explore eight most influential trends expected to define the automotive manufacturing landscape, offering insights into what lies ahead for the industry. The European Commission will start talks in the New Year on the future of the industry in the region as sales of safety first approach with EpicVIN electric vehicles stall. This is not just a European problem with Volkswagen and Stellantis, as Honda and Nissan merge, and Ford and General Motors struggle. Software-defined vehicles (SDVs), where software manages essential functions like steering, braking, and infotainment, will see rapid growth over the next few years.

The UK’s automotive sector offers a compelling illustration of the progress being made. In the first half of 2023, electrified vehicle production surged by 70%, highlighting the rapid pace of investment in EV production capabilities, and continues to grow. As battery technologies evolve, the future promises breakthroughs in recyclability and energy efficiency.

German startup ChargeX offers a modular EV charging solution that converts parking spaces into charging stations. The startup’s platform, Aqueduct, is easy to install, has 4 charging modules with up to 22kW, provides monthly reports, and uses a Typ2 charging cable. The solution recognizes the power requirements of every car and automatically controls the charging speed for each vehicle. Swedish startup Volta Trucks makes Volta Zero, an electric truck for urban deliveries. This vehicle’s design prioritizes driver safety and comfort, featuring a central driving position and panoramic vision for enhanced visibility.

• These tools equip dealerships to handle inquiries efficiently, thus freeing time for other important tasks.
• In 2025, automakers will continue improving AI systems’ reliability, reducing the likelihood of accidents, and enabling safer autonomous driving experiences.
• These vehicles reduce emissions and feature innovative designs for modern commuters.
• By 2025, the sector is expected to experience continued technological advances, heightened sustainability efforts, and shifting market dynamics.
• Additionally, CARNIQ Technologies supports the automotive sector with threat analysis, cybersecurity management, and secure system development.
• The chip shortage is one-factor holding cars back from getting to the dealership lots.
• 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.
• Therefore, these were the five trends transforming the automotive industry this year and beyond.

It encourages OEMs to develop subscription models, short-term rentals, and multi-modal transport integration. Shared mobility also influences vehicle design toward durability, modularity, and connectivity. Autonomous driving is a key innovation driver but remains in a development and regulatory phase.

Artificial intelligence (AI), the Internet of Things (IoT), blockchain, and advanced semiconductors allow autonomous driving, predictive maintenance, and secure connectivity. These technologies enhance safety, efficiency, and user experience across vehicles. 2025 is no exception—automotive manufacturers are expected to continue implementing more and more advanced safety features in their vehicles.

• A major barrier to this relentless growth, however, is consumer and regulatory concerns.
• This chiplet-based architecture integrates with automotive processors via PCIe Gen5 and UCIe interfaces, which allows customizable and cost-effective system enhancements.
• While BEVs and PHEVs showed some growth in September 2024, the year-to-date figures for BEVs are still lower than last year, and PHEVs also experienced a notable decline.
• Therefore, you should focus on environmentally conscious manufacturing processes and eco-friendly cars like electric vehicles.
• 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.
• Also, advanced battery management systems improve safety, extend battery life, and optimize performance.
• Moreover, automakers offer features on demand as they are turning cars into service platforms.
• Moreover, the startup engineers the ECU platform with compliance to ISO for functional safety.

Advanced Driver Assistance Systems (ADAS)

As we look forward to 2025, RSM’s automotive professionals predict a slowdown overall in the growth of the industry as well as a reduction in overall margins and profitability. Many OEM’s are already revisiting original forecasts and realigning through-put and production schedules accordingly. Automotive suppliers are renegotiating their vendor/supplier contracts to align with these new predictions. What lies ahead is not just a continuation of trends but the potential for transformation that pushes the boundaries of how we move, connect, and thrive. The recently proposed 25% tariffs on imports from Mexico and Canada, while temporarily delayed, may also have a drastic impact on the global automotive supply chain. 2025 is shaping up to be an interesting year for automotive with regards to global shifts in the market with a mixed bag of potential harmony and disruption.

Its product, THINKey, transforms smartphones into digital keys that allow users to lock, unlock, and start their vehicles. The integration of 5G networks is accelerating advancements in vehicle-to-infrastructure (V2I) and vehicle-to-vehicle (V2V) communication, supporting autonomous driving functionalities. The startup offers tools for real-time calibration health checks for deployed fleets to reduce time-to-market and operational risks.

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. While there are a lot of opportunities ahead for the industry, there will be plenty of challenges like cost pressures, growing competition, and globalization.

Explore the Top 10 Automotive Trends & Innovations in 2025

Despite these hurdles, the integration of sustainable materials is expected to accelerate as regulatory frameworks tighten and consumer demand for environmentally responsible products grows. 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.