Key Technology Trends in the Automotive Industry in 2025

The automotive world is experiencing the most substantial change since Henry Ford industrialized manufacturing a century ago. It’s important that the current transformation is triggered not only by extensive technology development but also by social demand. It appears that our future will be all about accessible mobility: mobility solutions will be more flexible, individualized, and compatible. Let’s consider what innovations are driving this new automotive revolution.

An Overview of the Latest Automotive Industry Trends

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. Whereas for the past 100 years, carmakers were largely focused on enhancing manufacturing to become more efficient at scale, the future is about redefining the role of the vehicle—now it’s rather a smartphone or computer on wheels.

New technology in the automotive industry opens up new opportunities. 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.

Read more: Project Management in Automotive Industry: Overcoming Project Challenges

In recent years, the automotive industry has been affected by the following trends:

• Electrification,
• Self-driving cars,
• Connectivity,
• Sustainability,
• Mobility-as-a-Service,
• Implementation of advanced safety features.

These tendencies are long-term and are expected to continue shaping the auto industry in the near future. In the next section, we’ll explore these and other automotive sector trends in more detail, and see how they will evolve in 2025.

5 Future Trends in the Automotive Industry: 2025 Outlook

In 2025, electrification and software integration will have an essential impact on the automotive industry. We expect to see the following automobile trends next year.

1. Electric Cars.

In recent years, the worldwide shift to electric cars has been one of the most prominent trends in automobile industry. Environmental factors have driven the growth of zero-emission vehicle technology, and the popularity of cleaner and more environmentally friendly electric vehicles (EVs) and hybrid electric vehicles (HEVs) has increased. The battery technology and charging infrastructure required for electric vehicles are also evolving—for example, lithium-ion batteries that have certain limitations can now be replaced by solid-state batteries that have higher energy density, are safer, more stable, and cost-effective. [1]

Challenges 

Despite optimistic forecasts, 2025 will be marked by EV’s slowdown. This is explained by the following factors: 

• Ongoing trade tensions between China and the West;
• Competition with Chinese EVs;  
• Infrastructure challenges (e.g., availability of charging stations, supply chain issues);
• High costs of electric vehicles’ manufacturing and their high prices for customers. 

As a result, automotive manufacturers are expected to switch to producing hybrid models—they are cheaper and more adaptable. [2; 8]

Shifting the focus to hybrid models 

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 rise of Chinese EV manufacturers 

In 2025, China is going to remain a leading manufacturer of electric vehicles. Currently, they sell most of the EVs worldwide, and this year, they are expected to market more EVs than combustion engine vehicles. [8]  

2. Software-Defined Vehicles. 

Software-defined vehicles are those that use software to conduct all operations (braking, driving, steering, providing infotainment, etc.). This software should be regularly updated to let users take advantage of the latest technological advancements and enhance vehicle performance. This trend is gaining traction in 2025: at the recent Consumer Electronics Show, the event that showcases technological innovations across industries, software-defined vehicles were in the limelight. This means that automotive manufacturers will be producing more SDVs in the years ahead. For example, Honda is going to partner with Amazon Web Services to improve data collection and software updates and in such a way speed up the transition to SDVs. [9]

3. Self-Driving Vehicles.

Innovative manufacturers take considerable interest in the potential of autonomous driving technology since it opens new opportunities for business growth. Up-to-date, autonomous vehicles are in the early stage of development: among the 6 levels of driving automation, there are only Level 3 (conditional automation) and some Level 4 (high driving automation) vehicles available in some regions. [3].

Despite the fact that fully autonomous driving is at least several years away from the present, in 2025 and beyond, this technology is expected to be actively developed and tested, and the number of autonomous cars on roads will increase. [8]

4. Alternative Fuels.

This is one of the new trends in automotive industry, which is to some extent in conflict with electrification. However, there are still a great number of fuel-driven cars, and despite the shift to producing electric vehicles, some car manufacturers don’t want to use batteries in their automobiles for some reason. So, the so-called e-fuels become a greener alternative to traditional fuel, which is also used beyond the automotive industry. E-fuels embrace e-kerosene, e-methane, or e-methanol which are produced as a result of synthesizing CO2 emissions and using renewable CO2-free electricity. Currently, despite their earlier ban, the European Commission has agreed to allow the selling of cars running on e-fuels after 2035, but on condition that they will have no climate impact. So, in 2025, we expect to see further developments in the area along with increased production of alternative fuels and testing them on the roads. [6; 11]

5. Automotive Supply Chain Issues. 

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. This is explained by several factors.

• Talent shortages: automotive manufacturers suffer from high employee turnover, which continues to decline;
• The shift to electric vehicles and incorporation of advanced features in vehicles: they cause a gap between the increased demand for specific components (semiconductors, batteries) and the available supply;
• Reliance on global supply chains: the COVID-19 pandemic has revealed their vulnerability and a number of auto manufacturers are relocating their production plants;  
• Geopolitical tensions: military conflicts in some regions of the world also contribute to intensifying supply chain challenges. [7]

Currently, auto manufacturers as well as auto OEMs (original equipment manufacturers) are trying to address the above-mentioned difficulties and try to reduce their dependence on the global supply chains. They are taking the following measures: 

• Investing in automation;
• Diversifying the suppliers;
• Localizing production; 
• Stockpiling some critical components. [12] 

However, overcoming supply chain challenges takes time, so they are likely to remain in 2025.

Therefore, these were the five trends transforming the automotive industry this year and beyond.

Other Technology Trends in Automotive Industry

Technology in automotive industry forges ahead—the latest technological advancements are more and more extensively used by the domain. Let’s consider the recent trends in automobile industry related to the application of latest technologies.

Connected Vehicles

Vehicle connectivity has become a really game-changing innovation in automotive industry that will transform the future of driving. Combined with 5G technology, it turns a car into a talking supercomputer being able to create wireless networks to communicate in real time with all traffic infrastructure including vehicles and traffic lights. Cars are becoming unprecedentedly smarter, and this trend is here to stay in the future. Seamless connectivity between automobiles, infrastructure, and pedestrians is expected to become commonplace and help increase traffic safety and improve driver experience. 

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. In the foreseeable future, the main infotainment trends will embrace the focus on cybersecurity, AI integration with voice recognition systems for seamless interaction with users as well as producing larger high-resolution displays. In 2025, a great number of car manufacturers are planning to improve their infotainment systems providing them with more and more advanced capabilities.

Advanced Safety Features

Safety has been one of the key trends in automotive industry. 2025 is no exception—automotive manufacturers are expected to continue implementing more and more advanced safety features in their vehicles. 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.

• Advanced Driver Assistance Systems (ADAS).

• Enhanced crash test standards.

• Protection of pedestrians and cyclists.

• Intelligent speed assistance.

• Data recording. [5]

Safety systems in vehicles are becoming more and more advanced year by year providing more sophisticated driving assistance and minimizing the chances for human error, so this trend is expected to remain in 2025 and beyond.

Mobility-as-a-Service (MaaS)

Mobility-as-a-Service has been among the latest trends in automotive industry for some years—it has become a popular convenient and cost-effective alternative to traditional car ownership and personal vehicles. The technology involves the integration of diverse transportation means into a single platform for delivering all-embracing mobility services. The platforms may include public transportation, taxis, micromobility vehicles, car leases, or their combinations. The MaaS market is growing and will continue to develop in 2025 and in the years ahead, which is explained by the increased variety of transportation options—ride/car/bike sharing, passenger cabs, commuter trains, and other mobility options. Also, the MaaS market growth is facilitated by increased connectivity, the adoption of 5G and 4G LTE technologies, wireless communications using smartphones, and automotive companies’ increased interest in MaaS. [4; 10]

3D Printing: Revolution in Automotive Manufacturing

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.

5G: Advanced Connectivity

Connectivity is one of the key trends in automotive industry, and 5G is what takes it to a more advanced level. 5G facilitates faster data transmission, higher network and bandwidth capacity as well as improves security (e.g., protection from cyberattacks). As a result, vehicles become even more connected with each other and the infrastructure and provide drivers with more advanced opportunities.

Immersive technologies: VR & AR

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.

Of course, this list of automotive technology trends isn’t exhaustive, and the industry is also taking advantage of big data and analytics, blockchain technology, artificial intelligence, automotive project management software, etc., each of which has its own role in the development of trends listed in this article.

Final Words

The automotive sector has been experiencing disruptive changes in recent years. The latest technology in automobile industry have revolutionized the way vehicles are designed, manufactured, and sold, and the vehicles themselves have become much more than a means of transport.

The current trends in the automotive industry seen in previous years will remain in 2025 and are likely to become automotive future trends. The most prominent of them will be electrification, connectivity, Mobility-as-a-Service market growth, advanced safety as well as the application of recent technologies—AI, 5G, 3D printing, immersive technologies, and blockchain.

Frequently Asked Questions

References

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2. Gartner Identifies Key Automotive Trends for 2025. (2025). Retrieved from: https://www.gartner.com/en/newsroom/press-releases/2025-01-16-gartner-identifies-key-automotive-trends-for-2025
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