Top trends driving the automotive sector in 2025 EMG

Swedish startup Radar Reticence designs radar sensors that advance sensor fusion capabilities in the automotive industry. Its technology applies signal processing algorithms to eliminate interference and ensure radar units operate reliably within the same environment. Also, MotionSafe protects the auto industry by securing vehicle data, supporting supply chains, and ensuring a safe transition to connected mobility. South African startup Motomatix applies AI and custom software solutions to strengthen supply chain resilience in the automotive repair sector. Supply chain resilience and nearshoring strengthen operational stability, while vehicle cybersecurity ensures trust in connected ecosystems.

🤖 Over-the-Air (OTA) Updates and Personalized Driving Experiences

This process enables us to identify the most impactful and innovative trends in the automotive industry. Volvo Cars has announced plans to adopt large aluminium castings for its next-generation electric vehicles, aiming to simplify production and enhance sustainability. Meanwhile, Toyota is reported to be cautiously evaluating the technology, balancing its benefits against potential risks. Sustainability has evolved from a competitive advantage to an existential necessity for the automotive industry.

• French startup Airnity provides a cellular connectivity platform for the automotive industry to enhance connected car operations.
• Further, their drivers use out-of-the-box or white-labeled apps to manage reservations or remotely access vehicles.
• The startup enables automakers to reduce waste, optimize design processes, and advance sustainable manufacturing strategies.
• One of the most significant shifts in the automotive industry is the widespread adoption of electric vehicles (EVs).
• These units support CCS2 and CHAdeMO standards, ensuring broad adaptability across EV models.
• In the United States, the newly appointed administration has issued several executive orders that will likely have drastic impacts on both global and national automotive markets.
• Automakers are adopting greener processes, from sourcing eco-friendly materials to utilizing renewable energy in manufacturing plants.

Shared mobility

• 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.
• Solid-state batteries increase energy density, shorten charging times, and give EVs longer ranges and greater convenience.
• Technological advancements, changes in consumer preferences, regulatory changes, and global economic conditions drive these trends.
• From electrification and software integration to new mobility models, the industry faces unprecedented change.
• Following these trends will equip enterprises with greater penetration in the emerging market, such as the growing adoption of EVs across China and India.
• This type of vehicle is defined by its ability to communicate with other software systems and collect data from its surroundings.
• In 2025, consumers may opt for flexible ownership models that allow them to pay a monthly fee to access a range of vehicles, including electric cars, luxury models, and even autonomous vehicles.

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. It’s estimated that to meet many of these net-zero emission goals, EVs will have to climb to at least half of all new car sales by 2050.

• The automotive industry report of the Future Readiness Monitor 2025 provides differentiated insights into strategies, challenges and fields of action in the industry.
• The main issue holding back the popularity of these vehicles is a lack of hydrogen fueling stations.
• 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.
• The Volta Zero addresses sustainability by enabling zero tailpipe emissions, contributing to cleaner city environments.
• The automotive regenerative braking market is expected to reach USD 13.83 billion by 2029, growing at a CAGR of 15.8%.

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.

Qumasoft automates Automotive Cybersecurity Management

It enables systematic results in cybersecurity, functional safety, and process conformance. In addition, the startup strengthens automotive cybersecurity with features such as real-time intrusion detection and automated containment protocols. It is also integrated into fleet management dashboards and security operations centers (SOC). By securing these systems, cybersecurity prevents hijacking of steering or braking functions, protects sensitive driver data, and shields automakers from costly recalls and reputational harm.

Driverless Vehicles- The Future of Connected Cars

People are shifting to EVs because of their design and their being environmentally friendly. 50% of buyers are willing to opt for EVs, so businesses should surely focus on marketing electric vehicles to make their brands more broader. Increased government focus on charging networks will be needed to support the expanding EV fleet. The autonomous vehicle sector will advance as UN regulators lift their speed limit. In the United States, the newly appointed administration has issued several executive orders that will likely have drastic impacts on both global and national automotive markets. One such order significantly impacts the future of EVs and EV infrastructure by rolling back policies that once supported their growth.

News + Insights

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.

What are the latest automotive industry trends in 2024?

It offers ready-to-use workflows across system, software, and project management processes. Its MotionSafe Privacy platform uses algorithms to monitor controller area network (CAN) traffic and detect anomalies. The platform also erases personally identifiable information (PII) from vehicle systems to maintain privacy. For example, over-the-air (OTA) updates depend on secure encryption and authentication to block malicious code injection. Likewise, fleet operators strengthen defenses for telematics, routing data, and driver information against manipulation. AI and machine learning (ML) support cyber defenses by enabling real-time anomaly detection and predictive monitoring.

Vehicle purchases shift online

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 how to time your sale by mileage bands real-time energy flows and integrates with solar systems to optimize renewable energy usage. It also enables customers to schedule and monitor charging activity for improved efficiency. In Europe, the new General Safety Regulation II (from July 2024) and related standards embed connectivity, advanced sensors, and cybersecurity requirements into safety compliance frameworks.

Apache Automotive develops Hybrid Cars

Since we’ve already explored the use of AI in the auto industry, it makes perfect sense to discuss connected cars, which are undoubtedly one of the top trends for the future. Connected cars are equipped with cutting-edge technology that allows them to connect to the Internet, other vehicles, and external software. These cars offer numerous benefits, not just for drivers and manufacturers, but also for passengers and the environment. 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. Autonomous driving technology is one of the automotive industry’s most exciting and potentially disruptive developments.

Shortage of chips will complicate the automotive industry

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%. Battery manufacturers have significantly reduced their production since early December due to the unpromising demand in the upcoming months. However, their preferences changed after some time, Buyers are willing to spend an amount, while looking for the best vehicles available in the market. Businesses would start optimizing their search guides as per the consumer’s preferences.

The startup’s product range includes residential wallboxes from 7 to 22 kW and commercial chargers up to 132 kW. These units support CCS2 and CHAdeMO standards, ensuring broad adaptability across EV models. For example, Qualcomm released reports and white papers highlighting C-V2X as a critical capability for intelligent transportation systems. They also emphasize that regulatory support and infrastructure readiness are essential for large-scale deployment.

Optimizing mobile experiences & personalization

Senegal-based startup Kemet Automotive manufactures all-terrain electric vehicles (EVs) designed for the road conditions. It builds connected EV models that operate reliably on diverse terrains and promotes sustainable mobility solutions for the region. The present-day automotive industry is affected by innovative ideas and is ready to transform and evolve rapidly. Current automotive trends are encouraging automotive manufacturers to offer consumers much more than a metal box on four wheels.

Tangram Vision offers a Perception Platform

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.

FlxTran develops Autonomous Vehicles for Unused Railway Tracks

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.

Urban Traffic Continues, but Some US Cities Spared

• Bosch demonstrates this through 77 GHz radar modules integrated into adaptive cruise control and collision avoidance systems.
• From energy-efficient factories to green hydrogen applications, the examples showcased highlight the industry’s shift toward greener production methods.
• 5G connectivity unlocks ultra-low latency communication, enabling real-time vehicle-to-everything (V2X) interactions.
• Moreover, high-performance computing platforms supply the processing power needed to run these systems in real time.
• Further, high-speed automotive Ethernet, 5G networks, and V2X communication extend a car’s perception beyond its line of sight.
• 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.
• Digital replicas and simulations allow manufacturers to test efficiency improvements before implementation.
• The shortage may not be as bad as it was in the early 2020s; however, even with a larger output, a report has found that only 26% of organisations that are reliant on these chips have a sufficient supply.
• Chinese EV automakers’ expansion into new markets, including Europe, other Asian countries, and Latin America as previously mentioned, could see a completely new global EV landscape.

Governments also enforce stricter safety standards, pushing automakers to integrate advanced sensor systems. Further, sensor fusion systems incorporate AI and machine learning (ML) algorithms to enhance optimization, predictive maintenance, and decision-making. 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 automotive cybersecurity market is projected to reach USD 5.11 billion in 2025, with a CAGR of 18.14% from 2024 to 2034.

• The platform also erases personally identifiable information (PII) from vehicle systems to maintain privacy.
• Its bidirectional charging technology allows EV batteries to supply electricity to buildings during outages or peak demand.
• Demand may decelerate due to the end of Chinese subsidies for EVs, but it should not lead to a decrease.
• Following these trends helps greater penetration in the emerging market, like the growing adoption of electric vehicles in China and India.

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.

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. Companies like Tesla, Waymo, and others are working tirelessly to refine the technology, which includes machine learning, computer vision, and lidar (light detection and ranging) systems. The US-based startup Apex AI enables automotive companies to implement complex AI solutions. Apex.OS runs on automotive electronic control units (ECUs) and offers robust, reliable, and secure APIs to develop autonomous mobility solutions. ApexAutonomy offers modules to build 3D perception, localization, and control to enable autonomous vehicles.