Top trends driving the automotive sector in 2025 EMG

Nearshoring is becoming increasingly prevalent, particularly in North America, where manufacturers are shifting operations closer to key markets to mitigate supply chain risks and reduce logistical costs. In the UK, auto production surpassed one million units in 2023, marking a significant recovery. However, with the cessation of certain models, there are concerns about a potential production dip in 2024. New EV launches slated for 2025 are expected to reinvigorate the market, underscoring the importance of product innovation in sustaining growth. Artificial Intelligence and Smart Factory technologies are no longer aspirational but integral to modern automotive manufacturing. Stellantis, for instance, has demonstrated how AI can transform production efficiency.

b. Regulatory and Legal Challenges

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. SDVs are more efficient and safer and can be updated with the latest technologies through software, keeping them up to date in a constantly evolving industry. The big data market in automotive is growing, with a projected market size of USD 5.92 billion in 2024, expanding at a CAGR of 16.78% to reach USD 12.86 billion by 2029. Startups are developing big data solutions to help manufacturers and related industries streamline operations and maximize profits.

Q) What are the predictions for the automotive industry?

Autonomous vehicles are reshaping mobility, from AI‑powered perception to intelligent infrastructure and generative simulation. This report explores how breakthrough technologies are accelerating the shift toward safer, smarter, and more sustainable transportation systems worldwide. Automakers will continue to incorporate these systems into even more affordable models, making safety technologies more accessible to a broader range of consumers. By leveraging tech and sustainable practices, the automotive sector can meet the challenges of tomorrow while delivering exceptional value to consumers.

Automotive Industry Trends 2025: Future & Growth of Automotive

LiDAR sensors enable precise 3D mapping, crucial for vehicle navigation and obstacle detection. AI algorithms process vast data from sensors and cameras, enhancing decision-making for safe, efficient driving. French startup Airnity provides a cellular connectivity platform for the automotive industry to enhance connected car operations. THINKey operates through a secure architecture using enclaves in the phone, vehicle, and cloud, adhering to the car connectivity consortium’s digital key standard. Additionally, the startup offers infotainment solutions with plug-and-play SDKs and certification-ready apps for phone mirroring and multimedia features.

Electrified Vehicles Top 50% of Sales in China

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.

• The global automotive sensor fusion market is projected to reach USD 3.3 billion by 2030 at a 42.4% CAGR.
• Overall, Auto News suggests that analysts expect the chip shortage will result in a loss of 3 million in vehicle production in 2025.
• This type of vehicle is defined by its ability to communicate with other software systems and collect data from its surroundings.
• Businesses would start optimizing their search guides as per the consumer’s preferences.
• In addition, the solution works with any EV charger and enables new features to be shipped throughout the network.
• While full autonomy is still years away, incremental advances are reshaping vehicle capabilities and market offerings today.
• They offer a safe, comfortable, and convenient multimedia experience with on-demand features that allow users to browse the web while in their vehicle.
• 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.

Mercedes-Benz CLA EV Feels Lighter Than It Is

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.

• Their scooters use an aviation-grade aluminum frame and are customized for sharing, safety, reliability, and durability.
• Let’s embark on this journey together, where ‘driving the future’ is more than just empty rhetoric.
• And Tesla had already decided to close all its stores in 2019, now selling all new cars online.

Bentley Supersports Vows to Be a Pure Driver’s Car

• Also, IoT sensors such as LiDAR and radar expand perception by generating environmental data.
• Singaporean startup EVIE Autonomous designs electric, autonomous shuttles for last-mile delivery, passenger transport, agriculture, and cargo movement.
• By incorporating AI tools, the company has reduced production costs while accelerating vehicle launch timelines.
• The startup uses automotive sensors and compute platforms to offer a scalable solution for cars to enable large-scale fleet learning.
• Soon, this will expand to more complex urban environments as vehicle access becomes increasingly prioritised over ownership among the driving masses.
• South Korean startup BOS Semiconductors builds Eagle-N, an AI accelerator for in-vehicle infotainment (IVI) and ADAS.
• The autonomous vehicle sector will advance as UN regulators lift their speed limit.

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.

EV sales are going to increase aggressively in 2025, providing a bright spot in the automotive industry. Governments are implementing innovative policies to encourage sales without increasing costs or benefiting high-income households. Car dealerships are no exception, as recent auto trends reveal that customers prefer to experience a car or dealership before purchasing. Top car brands and dealerships are embracing VR as part of their dealership photography strategies to improve the customer experience. The shortages have forced manufacturers to delay product launches and reduce outputs, among other issues. Asia, home to key production hubs, remains at the epicentre of attempts to address this crisis, with nations like Taiwan investing heavily in scaling chip production.

The Automotive Parts Market Continues to Grow

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.

Eloy provides Connected Car Solutions

It uses Tenstorrent’s Tensix NPU core to deliver up to 250 tera operations per second (TOPS) for efficient AI processing. The Global Startup Heat Map showcases the distribution of 6000+ exemplary startups and scaleups analyzed using the StartUs Insights Discovery Platform. It highlights high startup activity in Western Europe and the United States, followed by India.

Apostera specializes in Advanced Driver Assistance Systems (ADAS)

It enhances safety via driver-assist features and promises to revolutionize mobility with robotaxis and freight automation. Its progress influences OEM investments, partnerships with tech firms, and consumer expectations. While full autonomy is still years away, incremental advances are reshaping vehicle capabilities and market offerings today. These material innovations are also crucial to meeting evolving regulations, particularly the EU’s stringent emission standards. For EVs specifically, weight reduction translates directly into extended range read the vehicle data protection article and improved battery performance.

Also, EV charging infrastructure requires strong cybersecurity, as attackers target charging stations for data theft or service disruption. The startup also operates PartSmart, a real-time parts ordering platform that connects insurers, workshops, fleet owners, and suppliers. The platform enables visibility across the entire claims cycle and supports both OEM and aftermarket sourcing.

Owing to these advancements, the global SDV market is set to reach USD 3.3 trillion by 2034, growing at 31.2% annually. Also, GPS and V2X connectivity improve fleet distribution and service reliability. Telematics and IoT sensors monitor vehicle condition and enable predictive maintenance. For instance, Planet42 extends access to underbanked consumers in South Africa and Mexico. Additionally, the startup offers features such as platooning algorithms for safe and efficient vehicle grouping.

Discover all Automotive Technologies & Startups

The AV market is projected to reach USD 1.73 trillion by 2033, growing at a CAGR of 31.85% from 2025 to 2033. Automakers are investing in cybersecurity technologies such as hardware security modules (HSMs), AI-based intrusion detection systems, and secure over-the-air (OTA) updates to address these challenges. Automotive Manufacturing Solutions (AMS) is the essential resource for automotive manufacturing professionals and suppliers globally. We invite you to revisit these top stories, share your perspectives, and stay tuned for more in-depth coverage of the trends shaping the automotive world. 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.

• 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.
• Meanwhile, we are seeing the economic case for sustainable materials strengthen as manufacturers realise operational efficiency gains and reduce their long-term costs.
• In line with this, automakers focus on sustainability in their manufacturing processes, energy sourcing, and material selection.
• Moreover, the solution is customizable to any car model or specific OEM requirements.
• Conversely, in Europe, regulations are scaling up in preparation for the EU ban on new ICE vehicles by 2035.
• Sales of passenger cars were down 25% in the first half of 2022 compared to the same period in 2021.
• The trends in automobile industry and startups outlined in this report only scratch the surface of automotive innovations that we identified during our in-depth research.

Top 8 Automotive Manufacturing Trends Shaping the Future of 2025

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. For this in-depth research on the Top Automotive Trends & Startups, we analyzed a sample of 6000+ global startups & scaleups. However, automotive executives need help as they focus on new technology that meets consumer and regulatory demands.

European manufacturers are leading the charge with plans for affordable EV models, such as Citroën and Renault. These budget-friendly models aim to stimulate adoption following a dip in EV sales. Consumers research their preferred car on their mobile phones, looking for the best options, offers, and dealerships.

Mobility

• The platform LM Mission ControlTM offers free-floating or station-based car sharing, advanced shuttle services, shared dockless scooters, keyless rental programs, and peer-to-peer shared mobility.
• Battery improvements reduce costs and increase range, making EVs more accessible.
• Almost 40% of all autonomous vehicles sold in 2025 are predicted to have L2 ADAS features.
• This centralization allows faster product cycles, OTA updates, and cross-domain features.
• The US-based startup Apex AI enables automotive companies to implement complex AI solutions.
• This enables an all-inclusive model that replaces ownership with monthly flexibility.
• 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.

They have downgraded their EV targets and scaled back production of fully electric vehicles, suggesting that the transition to EVs will take longer than previously expected. The automotive industry leads in technological innovation that will reshape vehicle design, construction, and user experience in 2025. Emerging automotive industry trends include the increased adoption of electric vehicles (EVs), advanced semiconductors, and the growing focus on vehicle cybersecurity. The future trends in the automobile industry predict a roller-coaster ride for players. In 2025, the automotive industry will face global headwinds such as the energy crisis, slower global demand, and ongoing supply-chain issues.

Europe is projected to reach a 20.4% market share, while the US is likely to reach 11.2%. Moreover, it ensures perception in challenging conditions such as night, rain, fog, and snow. Also, cloud and edge computing balance fleet-scale analytics with millisecond in-car inference.

This increases the regulatory push toward connected and safety-enhanced vehicles. General Intelligence strengthens the evolution of software-defined vehicles by aligning human-inspired learning with safety. It also advances autonomous driving by enabling adaptability across vehicle types and conditions. In addition, the unit supports multiple communication protocols, including CAN and FlexRay. It also works with Ethernet and LIN, enabling integration across passenger cars, buses, trucks, and autonomous vehicles. Chinese startup Move-X Autonomous Driving offers Level 4 autonomous driving through integrated vehicle platforms designed for commercial deployment.