By optimizing driving routes, connected cars help reduce emissions, contributing to a greener future. Using data from IoT technology, drivers receive real-time route suggestions to avoid traffic jams and ease congestion, ensuring faster, stress-free travel. From supply chain optimization and manufacturing to personalized driving experiences and smart routing, advanced AI systems and real-time data analysis enable it all. By 2027, the global automotive AI market is expected to grow from its 2022 valuation of USD 2.3 billion to USD 7.0 billion, with a compound annual growth rate (CAGR) of 24.1%.
Discover all Automotive Trends, Technologies & Startups
More than 12% of consumers who financed a new car in June of 2022 had a monthly payment of $1,000 or more. It’s clear that a select subset of today’s consumers are willing to pay for high-end automobiles. Power say that sales of cars worth more than $100k were outselling lower-priced cars 3 to 1 in the first quarter of 2022. The market for FCEVs is expected to grow at a remarkable CAGR of nearly 70%, through 2026.
Automotive trends for 2025
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. 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.
ARK MOTORS builds Electric Vehicles
Did you know that EVs are projected to make up nearly 20% of global vehicle sales in 2026? That’s no longer a distant future — it’s happening now, and it’s transforming everything from manufacturing floors to your driveway. Connectivity is one of the key trends in automotive industry, and 5G is what takes it to a more advanced level.
V2ROADS simplifies Vehicle-to-Everything (V2X) Connectivity
For the eighth time, we asked managers and decision-makers in the automotive industry which trends and developments they are currently focusing on. The automotive industry report of the Future Readiness Monitor 2025 provides differentiated insights into strategies, challenges and fields of action in the industry. 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. Identifying new opportunities and emerging technologies to implement into your business early on goes a long way in gaining a competitive advantage. Get in touch to easily and exhaustively scout relevant technologies & startups that matter to you. Operating from Germany and the US, EcoG is a startup offering an IoT-based operating system and platform for EV charging.
- Cleaner production methods reduce operating costs and free resources for reinvestment in new technologies.
- The automotive regenerative braking market is expected to reach USD 13.83 billion by 2029, growing at a CAGR of 15.8%.
- Additionally, the startup offers plug-and-play solutions that simplify deployment in safety-critical applications such as EV fast charging and sensor integration.
- Also, the EV market is projected to reach USD 6.16 trillion by 2035 at a CAGR of 25.32%.
- Innovations like solid-state batteries are set to revolutionise manufacturing priorities and reshape the EV supply chain.
- 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.
Sustainability, regulations, and supply chain challenges in automotive manufacturing
Connected vehicles are entering a software-defined era where 5G, AI, and V2X convert cars into real-time data nodes that communicate smoothly with infrastructure, other vehicles, and the cloud. Our new report spotlights 10 connected vehicle trends to watch in 2026 that promise safer, smarter mobility and fresh revenue streams for automakers. Curious how electric vehicle trends like solar integration, AI-powered systems, and modular design are innovating mobility? This report explores the top 10 electric vehicle trends shaping the industry in 2026. Discover how these shifts improve charging, safety, and sustainability and what they mean for your business.
Cars have become even more connected
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.
- Virtual car shopping is the new norm and will remain a significant car industry trend for years.
- To address these threats, proactive cyber security is a must for automakers and their partners across the value chain.
- 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.
- Major technology providers are also solidifying their roles in key areas such as ADAS, electrical/electronic (E/E) architectures, and cloud computing solutions.
- In India, for example, electric car sales rose by 70%, driven by government incentives and new models, though future growth may be impacted if it sees subsidy reductions.
RevitsOne provides AI-based Fleet Management
UK-based startup Electric Car Converts changes classic Land Rovers into EVs by replacing combustion engines with modern electric motors and battery packs. Ultra-fast charging infrastructure minimizes downtime by offering hundreds of kilometers of range in just minutes. For example, BYD demonstrated a 1000 kW charging system that is capable of adding about 400 km of range in five minutes to its Han L and Tang L models under ideal conditions. Solid-state batteries increase energy density, shorten charging times, and give EVs longer ranges and greater convenience.
Launching of fuel cell EVs
Also, radar ensures long-range detection of moving objects in all weather conditions, which is critical for adaptive cruise control and highway safety. US-based startup NuNami designs automotive semiconductors that provide reliable connectivity and safety-critical interfaces. Its modules integrate high-voltage isolation, digital error correction, and built-in self-testing to ensure secure data transfer and fault-tolerant operation in automotive systems. They also incorporate floating-point units that improve computational accuracy and performance. The startup provides single-chip motor control solutions that integrate RISC-V processor cores with programmable MOSFET drivers, FD-CAN and LIN interfaces, and dedicated PWM modules. The systems optimize the performance of electric power steering, vehicle pumps, cooling fans, and HVAC modules.
🚗 Top 7 Automotive Industry Trends Shaping 2026
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. To understand AI’s impact on the automotive industry, it is important to consider the ongoing shifts across the automotive landscape, especially the transition toward software-defined vehicles. Modern vehicles have transitioned from distributed architecture to a centralized, high-performance computing model. This transformation has further streamlined the vehicle architecture, facilitating over-the-air software updates, more efficient management, and lowering overall complexity. EloyMessage broadcasts fixed or dynamic visual and audio messages directly into vehicles, reducing driver distraction with patented technology.
These advancements are driving the future of connected vehicles, which are increasingly becoming a standard feature in new cars. Modern vehicles are now equipped with a unique digital identity, making it easier to track and share data for applications like insurance, driver safety, predictive maintenance, and fleet management. Nigerian startup Revive Earth develops the Revive Kit, to convert petrol vehicles into efficient EVs.
It combines compound semiconductor nanomaterials with scalable silicon manufacturing for mass-market microelectronics. This approach ensures our reports provide reliable, actionable insights into the automotive innovation ecosystem while highlighting startups driving technological advancements in the industry. However, an SSAB survey reveals that cost and investment challenges remain significant barriers to widespread adoption. 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.
- These all-inclusive options reduce the financial burdens of ownership, especially for urban users.
- By the end of that decade, it’s predicted that over 30% of the cars on the road will be EVs.
- Companies like Toyota and Hyundai are investing in hydrogen fuel cell technology.
- Probably the most important trend in the automotive industry is the worldwide shift to electric vehicles (EVs).
- Europe is projected to reach a 20.4% market share, while the US is likely to reach 11.2%.
- However, that number is smaller than it was in 2019 when more than 80% of people commuted by car.
This digital transformation enhances scalability, a key driver in the competitive automotive sector. Companies like Huawei are allocating significant resources to developing EVs with cutting-edge ADAS and autonomous features. These technologies aim to reduce accidents and provide a safer driving experience.
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. LiDAR provides high-resolution 3D mapping that allows vehicles to detect road geometry, obstacles, and pedestrians with centimeter-level accuracy.
- As per market and industry experts, these four trends represent the future of the automotive industry.
- These innovations collectively propel the industry towards safer, more efficient transportation.
- 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.
- 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.
- However there are huge opportunities for the industry in the shift to software-defined vehicles and autonomous driving.
- It also aligns with ISO for cybersecurity and ensures reliability under demanding automotive standards.
Cyber security in the automotive industry
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. However, although the Chinese EV market may take some time to adapt to the new subsidy-free scenario, the situation is optimistic.
They VIN decoder as digital safety tool also emphasize that regulatory support and infrastructure readiness are essential for large-scale deployment. BMW’s Neue Klasse illustrates this shift with four superbrains that reduce wiring by 600 meters and reduce vehicle weight. This centralization allows faster product cycles, OTA updates, and cross-domain features.
