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.

The rise of online car buying and digital retail experiences is forcing dealerships and OEMs to innovate. Demand for customizable, software-updatable vehicles is growing, as is interest in electric and hybrid powertrains. Automakers must balance traditional desires for performance and style with new expectations for tech integration and environmental responsibility. The inherent flexibility of electric powertrains is enabling automakers to reimagine vehicle design, resulting in lighter, more efficient vehicles. Improved range, faster charging times and enhanced performance are making EVs not just environmentally conscious choices, but compelling alternatives for everyday use.

🌐 Trend 4: Global Supply Chain Resilience and Geopolitical Shifts

With customers becoming more demanding, rules and regulations are becoming stricter, and competition is stronger and faster. Many enterprises are moving ahead to create autonomous vehicles with all the multi-faceted benefits. To meet these new requirements and realize this long-term vision, approaches are required to push against the status quo.

Shifting the focus to hybrid models

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. This also presents an emerging opportunity to connect the vehicle ecosystem, creating a dynamic adaptation of data for road and weather conditions, assisted by IoT-enabled devices. Almost 40% of all autonomous vehicles sold in 2025 are predicted to have L2 ADAS features.

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.

Micromobility Presents a Potential Shift Among Consumers

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 Semiconductors: Asia-Pacific Leads with 45% Global Share

• By 2030, automotive industry trends 2030 will witness a significant shift towards electric and autonomous vehicles, driving sustainable growth in the car market.
• Advanced Driver Assistance Systems (ADAS) and autonomous driving technologies continue to evolve, bringing unprecedented changes to vehicle safety and functionality.
• While fully autonomous vehicles (AVs) are not yet standard on the roads, significant advancements are being made in 2025 toward realizing the vision of driverless cars.
• Looking ahead, JLR’s focus on carbon-neutral manufacturing and environmentally responsible practices sets a powerful example for the industry.
• This decision also highlights a broader trend toward diversification in battery production hubs.
• Singapore’s adaptive traffic signal systems, along with real-time monitoring, ERP pricing, and predictive analytics, improve traffic efficiency.
• Automakers move from fleets of electronic control units (ECUs) toward centralized computing platforms that run multiple domains on Systems on Chip (SoCs).
• Automakers are also adopting hyper-personalized features to offer customized experiences through infotainment systems, user profiles, and real-time navigation updates.

Automakers need to redesign their vehicles or should look for other chip options available. The autonomous vehicle (AV) market is on an impressive growth trajectory, expected to surge from a market value of $1,921.1 billion in 2023 to a staggering $13,632.4 billion by 2030, with a CAGR of 32.3%. A major driver of this growth is the increasing focus on commercial applications, such as logistics and ride-sharing services. Advances in AI, sensor technology, and connectivity are also playing a key role in improving the safety and adoption of autonomous vehicles. The global automotive semiconductor market is expected to grow at a rate of 8.1% between 2023 and 2030.

In the US, the AV market is expected to expand, rising from USD 22.6 billion in 2024 to USD 222.8 billion by 2033, with a CAGR of 28.92% starting in 2025. Regulatory frameworks like UNECE WP.29, effective from last year, mandate stringent cybersecurity measures to drive compliance-related investments. Moreover, Avvenire has a strategic agreement with Daymak International Inc., Canada’s leading LEV distributor. Daymak will assemble Avvenire’s vehicles and distribute them through its network of over 200 dealers in 25 countries. Further, as part of larger decarbonization efforts, the Intergovernmental Panel on Climate Change (IPCC) emphasizes the contribution of EVs to the reduction of greenhouse gas emissions. Europe is projected to reach a 20.4% market share, while the US is likely to reach 11.2%.

• The integration of 5G networks is accelerating advancements in vehicle-to-infrastructure (V2I) and vehicle-to-vehicle (V2V) communication, supporting autonomous driving functionalities.
• OEMs are advancing and navigating regulatory challenges to introduce and test L3 and L4 automation, setting the background for augmented adoption of autonomous vehicles.
• Current automotive trends are encouraging automotive manufacturers to offer consumers much more than a metal box on four wheels.
• These material innovations are also crucial to meeting evolving regulations, particularly the EU’s stringent emission standards.
• Top car brands and dealerships are embracing VR as part of their dealership photography strategies to improve the customer experience.
• EVs typically use 2-3 times more semiconductor content than internal combustion engine models, and in powertrain-specific components, that multiplier is possibly higher.
• AI algorithms process vast data from sensors and cameras, enhancing decision-making for safe, efficient driving.

Solid-state batteries increase energy density, shorten charging times, and give EVs longer ranges and greater convenience. For example, Toyota plans a commercial rollout by 2027 to bring solid-state battery EVs into mass production. Moreover, automakers reduce tailpipe emissions, cities improve air quality, and governments reduce fossil fuel dependence.

Insights

This ensures precise planning, reduces downtime, and enhances efficiency in assembly operations. This decision also highlights a broader trend toward diversification in battery production hubs. With the Middle East emerging as a significant player in the EV supply chain, manufacturers must adapt their strategies to seize these new opportunities. Looking ahead, Tesla’s strategies are likely to influence industry standards and inspire localisation efforts across the sector. With its focus on next-generation cells and expanded production capacity, Tesla is paving the way for a more efficient and sustainable global EV landscape. The next wave of auto trends is shaped by enabling technologies that extend beyond electrification and connectivity.

Explore the Top 10 Automotive Trends & Innovations in 2025

Moreover, automakers and tier-suppliers are increasingly focusing on sustainable steel production to lower emissions across their supply chains. Further, Jaguar Land Rover is pioneering a closed-loop recycling process for seat foam, turning waste from old vehicles into high-quality material for new ones. This innovative, circular production approach supports sustainability goals by reducing landfill waste and advancing circular economy practices in automotive manufacturing. 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.

Electrified Vehicles Top 50% of Sales in China

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.

(c) 2025 Automotive Manufacturing Solutions

• In addition, Hawaii passed a bill in 2022 that will create a hydrogen refueling system rebate for developers.
• Our new generation which is called millennials or Genz researches everything online before the actual purchase.
• Additionally, smart virtual assistants are emerging as a key HMI feature, aiding drivers and passengers in interacting with vehicles and external services.
• ADAS adoption enables lane-keeping, adaptive cruise control, and emergency braking to rely on AI-powered processors and sensor fusion chips.
• Such advancements align with global trends favoring autonomous fleet deployment in urban areas, positioning automakers to meet future demand for self-driving capabilities.
• The semiconductors also enable infotainment, voice assistants, and AI-driven interfaces for a better user experience.

By 2025, nearly all new vehicles are expected to feature advanced connectivity options, integrating aspects of digital life directly into driving experiences. Such advancements align with global trends favoring autonomous fleet deployment in urban areas, positioning automakers to meet future demand for self-driving capabilities. While there are a lot of opportunities ahead for the industry, there will be plenty of challenges like cost pressures, growing competition, and globalization.

NuNami designs Vehicular Interface Systems

• This will drive growth opportunities for automakers in the years to come and shape the automotive industry outlook in the future.
• It also advances autonomous driving by enabling adaptability across vehicle types and conditions.
• 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.
• The integrated powertrain segment is likely to hold ~60-65% of the total e-powertrain market in 2025.
• Seamless connectivity between automobiles, infrastructure, and pedestrians is expected to become commonplace and help increase traffic safety and improve driver experience.
• Singapore-based startup Beam focuses on e-scooters to promote shared mobility in the Asia-Pacific region.
• It includes journey replays, geofencing, and driver behavior monitoring to enhance fleet efficiency and safety.

Top car brands and dealerships are embracing VR as part of their dealership photography strategies to improve the customer experience. As we look forward to 2025, RSM’s automotive professionals predict a top investment cars to buy today 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.

As 5G and the Internet of Things (IoT) continue their growth, vehicles are becoming more and more connected. And TuSimple is hoping to begin selling completely autonomous Level 4 trucks to fleet operators in 2024. A major barrier to this relentless growth, however, is consumer and regulatory concerns. In addition, more than half of all vehicles are expected to fall into the Level 1-5 range in 2024.

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.

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. Connected cars enable real-time navigation updates, remote diagnostics, and seamless smartphone integration. They also support smart city initiatives by offering data for traffic management and logistics automation. Established in 2007, SG Analytics is a Great Place to Work® (GPTW) certified company with a team of over 1200 employees and a presence across the U.S.A., the UK, Switzerland, Poland, and India.

Major transportation industry trends in 2026

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. Further, its AI-enabled depth sensor, HiFi, enhances 3D sensing with 1.6-megapixel supersampled depth, 8 TOPS of AI compute, a 136° ultra-wide field of view, and connectivity options like PoE and USB-C. This platform uses secured safety assurance and risk-mitigation principles to detect and address failures in assisted and self-driving systems. Qumasoft’s solution enables companies to develop, produce, and operate cybersecure vehicles and components efficiently.

• They are used by the automotive industry for car manufacturing, employee training as well as vehicle sales and marketing.
• US-based startup Avvenire develops LEVs for efficient and eco-friendly urban transportation.
• By streamlining its supply chain through vertical integration, Tesla is raising the bar for EV production efficiency and sustainability.
• 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.
• The increasing adoption of EVs globally drives the optimization of energy usage and enhances features like regenerative braking systems through sensor fusion technologies.
• Global economic slowdowns and fierce competition from Chinese manufacturers have slowed the growth of EVs.
• AI, additive manufacturing, the Internet of Things, and 5G have become sources of product innovation and manufacturing efficiency, which in turn has led to revolutionary changes in customer experience.

Notably, China, Europe, and the US have established themselves as the leading EV markets, with other countries following suit. Norway set a record in the electric vehicle sector in August 2024, as the number of all-electric vehicles on the road surpassed that of gasoline-powered vehicles for the first time. In terms of new car sales, Norway boasts the highest percentage of battery-electric vehicles in Europe. It also leads Europe in new EV market activity, with just 9.61 percent of new passenger car sales in 2023 attributed to gasoline, diesel, and non-rechargeable hybrid vehicles. By 2025, V2X technology is expected to significantly create more innovative transportation networks and advance autonomous driving capabilities.

• In 2025, more dealerships are expected to offer online sales, vehicle inspection, and home delivery.
• A combination of technological advancements, sustainability initiatives, and new business models will shape the automotive industry in 2025.
• The startup also offers META, a compact shuttle for urban mobility; and SPACE for passenger transportation.
• This also presents an emerging opportunity to connect the vehicle ecosystem, creating a dynamic adaptation of data for road and weather conditions, assisted by IoT-enabled devices.
• And the US Inflation Reduction Act ties USD 7500 EV subsidies to regional sourcing.

Additionally, interest rates for used vehicle loans are higher than those for new cars. It is anticipated that used-vehicle sales will not return to pre-pandemic levels of around 40 million units per year until 2025, similar to new-vehicle sales. A recent survey reveals automotive companies have product development and launch cycles shorter than 18 months. As per market and industry experts, these four trends represent the future of the automotive industry. 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.

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. Digital twins validate updates virtually, with Stellantis using virtual engineering workbenches to test thousands of scenarios before rollout. In addition, Move-X supports over-the-air updates, ensures continuous improvement of system performance, and allows customization across diverse use cases. Moreover, its NuPort solution extends reliability by enabling connections between automotive components that support both diagnostics and long-term endurance. Its solution, carSECURITY, provides organizations with a complete cybersecurity process landscape.

The system uses an app to schedule rides on autonomous vehicles, cutting down trip times compared to the available commuting options. FlxTran’s approach improves connectivity and access to opportunities beyond major cities. This chiplet-based architecture integrates with automotive processors via PCIe Gen5 and UCIe interfaces, which allows customizable and cost-effective system enhancements.

The system combines this data with inputs from multiple cameras and sensors to enable AI-driven perception and decision-making in near-real-time driving scenarios. Additionally, the startup offers plug-and-play solutions that simplify deployment in safety-critical applications such as EV fast charging and sensor integration. CARNIQ Technologies secures the auto industry by embedding compliance-driven cybersecurity into development lifecycles.

The USMCA requires 75% of motor industry components to be produced in North America. And the US Inflation Reduction Act ties USD 7500 EV subsidies to regional sourcing. 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. Also, advanced composites and recycled inputs reduce reliance on virgin resources.

After the pandemic, we developed a habit of shifting all requirements to online methods, and so do goes with the automobile industry. Our new generation which is called millennials or Genz researches everything online before the actual purchase. Car dealerships are no exception, as recent auto trends reveal that customers prefer to experience a car or dealership before purchasing.

The Auto Industry Trends & Startups outlined in this report only scratch the surface of trends that we identified during our data-driven innovation & startup scouting process. 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.