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. 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.
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These advanced technologies are widely used across a great number of industries and the automotive domain is no exception. They are used by the automotive industry for car manufacturing, employee training as well as vehicle sales and marketing. The main advantage of this digital technology is that it allows auto manufacturers to create complex and at the same time lightweight vehicle parts. 3D printing them is faster than traditional manufacturing and cheaper, which makes the whole process more efficient. Also, additive manufacturing makes prototyping more rapid, which enables faster design and testing periods for new vehicles. As the technology evolves and becomes more affordable for the industry, it opens more and more opportunities every year.
While automakers spend billions developing electric cars, most governments worldwide have ambitious plans to phase out internal combustion engines. According to Statista’s report, global sales of electric vehicles are expected to reach an astounding US$786.2 billion by the end of 2024. The concept of Mobility as a Service (MaaS) is changing how people think about transportation.
Aviva Links advances In-vehicle Connectivity
Also, applications extend from adaptive cruise control, lane-keeping, and traffic jam assistance to robotaxis and driverless trucking. Advanced cameras paired with computer vision enable vehicles to classify road users, read signs, and recognize traffic signals, directly supporting ADAS and autonomous navigation. Silicon carbide (SiC) semiconductors improve energy efficiency in high-voltage EV systems by reducing losses and enhancing thermal management. Moreover, Asia-Pacific leads the automotive semiconductor market with a 45% global share. 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.
- Probably the most important trend in the automotive industry is the worldwide shift to electric vehicles (EVs).
- Companies like Toyota and Hyundai are investing in hydrogen fuel cell technology.
- These all-inclusive options reduce the financial burdens of ownership, especially for urban users.
- 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.
- They also incorporate floating-point units that improve computational accuracy and performance.
- By the end of that decade, it’s predicted that over 30% of the cars on the road will be EVs.
- This approach enhances road efficiency and reduces fuel consumption, thereby lowering emissions.
- Europe is projected to reach a 20.4% market share, while the US is likely to reach 11.2%.
Shared/micro-mobility presents a potential shift among consumers
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%.
Best of 2025 How Generative AI Is Transforming Industry
Michelin’s development of tyres composed of 45% sustainable materials is a noteworthy example of how companies are rethinking material usage to minimise their environmental footprint. Henkel is using digital simulation tools to co-develop EV battery designs with automotive partners. The simulations improve thermal management, safety, and efficiency to meet the demands of future mobility. As we reflect on 2024, it’s clear that this year was a turning point for automotive manufacturing.
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.
Launching of fuel cell EVs
Sales for BEV and PHEV in Europe increased by 137% in 2020 compared with the previous year (despite a 20% year-over-year decrease in the total car market). In this world where we are shifting to EVs, individuals usually prefer to shift to smaller vehicles which are much more affordable and environmentally friendly. They are much more convenient to use in these congested cities and parking these vehicles is much easier. Younger generations, especially Genz or millennials prefer these vehicles as they are much more attractive.
- Personalising the IVX will drive the need for AI agents, which is one reason why EDA tool vendor Synopsys is working with Sima.ai.
- The integration of 5G networks is accelerating advancements in vehicle-to-infrastructure (V2I) and vehicle-to-vehicle (V2V) communication, supporting autonomous driving functionalities.
- This communication system is crucial for the safe deployment of autonomous vehicles, as it will enable them to “talk” to other vehicles and infrastructure, reducing the risk of accidents.
- Its product range includes an electric modular chassis, the standard autonomous shuttle pod, and pods for other applications.
- Indian startup ThinkSeed develops middleware solutions that enhance smartphone connectivity to vehicles for secure access and infotainment.
- Prices are expected to decrease as supply-chain issues improve, and sales continue to soften.
- Brands need to provide specific offers by analyzing their customer’s needs, preferences, and behavior.
- Its bidirectional charging system enables EV batteries to both draw electricity and feed surplus power back, which balances demand during peak hours and reduces strain on infrastructure.
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. 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.
Integrated Powertrains will be Standard in EVs of the Future.
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. The idea behind a circular economy is to create a closed-loop system where materials are reused, refurbished, and recycled rather than disposed of.
EloySignals utilizes AI to optimize traffic flow, advising drivers on stopping or proceeding, and prioritizing emergency vehicles and vulnerable road users. India-based startup DriveTech-AI builds solutions centered around optimizing the vehicle testing process through smart solutions. Its suite of platforms and solutions allows automotive OEMs to accelerate testing data analysis and enhance automation and team collaboration. For example, its StellarAi data intelligence platform offers templates to quickly identify engineering variables, trends, and vulnerabilities. AI technologies like machine learning, deep learning, and computer vision are advancing robotic automation.
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Improved range, faster charging times and enhanced performance are making EVs not just environmentally conscious choices, but compelling alternatives for everyday use. The global vehicle subscription market is projected to reach as high as USD 791.0 billion by 2032 at growth rates of up to 74.6% annually. This rapid expansion reflects how automakers and mobility providers are shifting from ownership models toward flexible, access-based mobility solutions. Sensor fusion drives the automotive industry’s shift to autonomy by integrating data from cameras, light detection and ranging (LiDAR), radar, and ultrasonic sensors into a unified perception system. Mercedes-Benz’s Drive Pilot showcases this with over 35 sensors, including LiDAR and radar, working together to achieve certified Level 3 autonomy. In 2026, the auto industry accelerates its transition from combustion-based production to electrified, software-driven, and sustainable mobility.
Stellantis, for instance, has demonstrated how AI can transform production efficiency. By incorporating AI tools, the company has reduced production costs while accelerating vehicle launch timelines. This approach enhances flexibility across its global operations, ensuring a rapid response to shifting market demands. Similarly, Skoda has embraced AI to navigate the complexities of modern manufacturing. Senegal-based startup Kemet Automotive manufactures all-terrain electric vehicles (EVs) designed for the road conditions.
Further, their drivers use out-of-the-box or white-labeled apps to manage reservations or remotely access vehicles. Factories equipped with IoT-enabled devices and machine learning capabilities are emerging as the backbone of next-generation automotive production. These facilities use data-driven insights to optimise processes, reduce energy consumption, and increase operational efficiency. This trend is reshaping how manufacturers think about scalability and flexibility, particularly as the demand for electric vehicles continues to grow, and will continue to make itself felt throughout 2025. EV technology is the catalyst for transformation—it’s forcing OEMs to rethink vehicle architecture, supply chains, and customer engagement. Battery improvements reduce costs and increase range, making EVs more accessible.
Aadhya Navik designs Ride Safety Software
The automotive industry is gearing up for a transformation as fast and furious as the iconic franchise suggests. The latest technological advancements and evolving consumer preferences are seriously revamping vehicle production as we know it, remodeling the auto market for good. A quick online search reveals that by 2040, 33 million autonomous cars are expected to be on the road. Autonomous driving technology is one of the automotive industry’s most exciting and potentially disruptive developments.
Electrified Vehicles Top 50% of Sales in China
In addition, TuSimple has partnered with Navistar and UPS to test its software under supervised driving conditions. This could allow drivers to retain their jobs, but avoid the injuries and deaths that result from exhaustion. Additionally, Chevrolet, Hyundai, Kia, Nissan, and Jaguar have all released more affordable EVs that have a range of anywhere from 200 miles to 250 miles. Right now, there are only about 73,215 public EV charging stations across the US. Lithium-ion battery prices have fallen by 89% over the last decade, reaching a price of $137/kWh in 2020.
🛣️ Trend 3: The Autonomous Horizon – Self-Driving Cars on the Near Road
The AI in Automotive industry in 2026 is evolving as AI, autonomous technologies, and software-defined vehicles reshape global mobility systems. This AI in Automotive Market Report examines the trends and technologies driving vehicle intelligence, operational efficiency, safety advancement, and data-driven mobility innovation. What initially appeared to be a niche sector is now the foundation of the auto industry’s transition.
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. Italian startup Moi combines thermosetting composite materials and 3D printing to manufacture high-performance parts for the automotive industry. Moi uses continuous fiber manufacturing (CFM) technology, robotic intelligence, and digital fabrication to deposit fibers. As a result, the solution is easily scalable for producing composites for panels, frames, and interior components.
Top 10 Automobile Industry Trends & Innovations (
Information technology has become a crucial part of the recent trends in the automobile industry as priorities change over time. The automotive industry stands at a thrilling crossroads, where innovation meets complexity and opportunity rides alongside challenge. The industry will continue to experience disruptions from geopolitical headwinds to regulatory and legislative developments, data security and economic challenges. Maximising the ROI to investors and stakeholders while remaining competitive will be priorities of the industry.
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. Innovations like solid-state batteries are set to revolutionise manufacturing priorities and reshape the EV supply chain. These over-the-air updates are becoming essential for ensuring vehicle reliability, safety and security, and are opening new revenue streams for manufacturers. Moreover, its software platform manages real-time energy flows and integrates with solar systems to optimize renewable energy usage.
Mobility
Subsidies and incentives for EVs are also under scrutiny, with plans to reconsider or eliminate government-imposed market advantages that favour them. Crucially, the order halts federal funding for EV infrastructure projects, such as charging station programs, until they align with the administration’s policy goals. Additionally, looking at supply chains, AI and machine learning are driving the rise of autonomous logistics systems that can self-optimise routing, scheduling, and inventory management. These systems aim to minimise human intervention, improve decision-making, and enhance overall efficiency, paving the way for smarter supply chain operations. In Latin America, much like other regions, the electrified vehicle fleet is still only a small share of the total vehicle fleet; however, that share is growing. The Latin America Energy Organisation (Olade), released a report showing that with the increase in supply, lower prices and tax incentives, Latin America and the Caribbean have great potential for EV growth.
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.
Discover trends, understand the VIN before signing papers forecasts, and global developments shaping the future of mobility. These systems will become increasingly sophisticated, moving toward semi-autonomous driving capabilities and improving the overall driving experience. Companies like Toyota and Hyundai are investing in hydrogen fuel cell technology.
The platform allows autonomous vehicles to discover AVs, service providers, or clients around them. The vehicle-to-vehicle (V2V) communication is either on-blockchain, with smart contracts or off-blockchain using DAV’s protocols. The startup develops protocols for drone charging networks, drone flight planning, and open mobility. Advanced manufacturing technologies, such as megacasting and giga-stamping, are playing a pivotal role in enabling the industry’s transformation. Megacasting, which involves producing large aluminium castings to replace multiple smaller components in vehicle structures, is gaining momentum in the automotive industry. Shared mobility reduces individual car ownership, especially in urban areas, impacting vehicle sales volumes but increasing demand for fleet vehicles and mobility-as-a-service (MaaS) platforms.
Bring the studio to your cars.
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. For instance, India’s eBus Sewa scheme deploys 10K electric buses to curb urban pollution. Government incentives, environmental imperatives, technological advances, and shifting consumer preferences drive this expansion. The EU enforces a 2035 zero-emission mandate, and the US Inflation Reduction Act channels subsidies into domestic EV production and attracts international manufacturers.
The high prices and increasing interest rates are causing sales to decline for dealers and automakers nationwide. Prices are expected to decrease as supply-chain issues improve, and sales continue to soften. However, interest rates may remain high as the Federal Reserve works to lower inflation. In October 2022, the delivery lead time for chips decreased by six days to 25.5 weeks, the most significant drop since 2016. Approximately 70 percent of industrial companies report faster chip supply, possibly due to weakened consumer spending and demand. These constraints are expected to persist into 2025, as semiconductor production has exceeded full production-rate utilization since 2019, with recent rates surpassing 95%.
- The sensor integrates chip-level innovations that reduce power consumption, simplify hardware complexity, and enable performance through a modular architecture.
- 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 Trends & Startups outlined in this report only scratch the surface of trends that we identified during our data-driven innovation & startup scouting process.
- In 2025, we expect to see more automated and electric shared vehicles providing affordable, on-demand transportation.
- The focus will also be on cybersecurity and fail-safe systems to build consumer trust.
- Its technology transports ultra-high-bandwidth video and data from sensors to processors with ultra-low latency.
- This includes driver monitoring systems, adaptive cruise control, and collision avoidance systems.
- The platform enables visibility across the entire claims cycle and supports both OEM and aftermarket sourcing.
Automotive Sourcing Models are Changing
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. Connected cars are vehicles that use wireless means to connect to the Internet of Things. They offer a safe, comfortable, and convenient multimedia experience with on-demand features that allow users to browse the web while in their vehicle. They provide various features such as remote diagnostics, vehicle health reports, 4G LTE Wi-Fi hotspots, turn-by-turn directions, and warnings of car health issues.
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. 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.
They 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.