FRM 2025: Sector Report Automotive Industry KPMG in Germany

Examples are bikes, scooters, and mopeds, as well as the electric versions of these vehicles. The chip shortage is proving to be costly for the industry with many auto manufacturers shutting down plants due to low supply. Increasing battery efficiency as well as EV charging infrastructure can speed up adoption. Because of this growth, it’s estimated that there are more than 40 million electric cars on the road. Espite growing inventory levels, new vehicle prices continue to rise, reaching a record average transaction price of $49,507 in December 2022.

Advanced Safety Features

These systems can detect objects, evaluate road environments, and make real-time decisions to further enhance safety and comfort. Consumer trends in the automotive industry highlight that short videos are more effective in converting leads into customers. Dealerships can take advantage of different video formats, like how-to videos, car highlights, and customer testimonials. With more and more customers prioritizing environmental sustainability, the focus should be on promoting environmentally conscious manufacturing processes along with eco-friendly cars like electric vehicles. The truck’s design removes the internal combustion engine, advancing commercial vehicle safety standards, and protecting pedestrians and other road users. Volta Trucks also offers leasing or purchasing options, and integrates services like maintenance, charging infrastructure, and training through its truck-as-a-service model.

RevitsOne provides AI-based Fleet Management

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. Sustainable manufacturing and EV expansion deliver cost savings, regulatory compliance, and reduced emissions, positioning automakers as leaders in green mobility. For this in-depth research on the Top Auto Trends & Startups, we analyzed a sample of 3836 global startups & scaleups. The car market trends are shifting towards regional suppliers to diversify their supply chains and mitigate risks. OEMs seek alternative sources to improve sourcing flexibility and bring products to market faster.

Tangram Vision offers a Perception Platform

The growing shared mobility trend also looms as more people are using shared transportation methods instead of owning cars. GenAI offers potential for advanced applications like predictive maintenance, where AI could assist in analyzing vehicle data and forecast potential failures before they occur. This would mark a critical shift toward an era of personalized vehicle recommendations and optimized repair services. By addressing issues proactively, manufacturers and service providers can further reduce breakdowns, enhance vehicle reliability, and improve overall customer satisfaction.

📱 The Digital Dealership Experience and Online Sales

The adoption of pre-owned luxury cars is increasing due to easy access to financing and lower entry prices. Manufacturers are investing in innovative mobility technologies, such as personal voice assistance, autonomous driving, and AI and ML, creating a positive market outlook. Developing high-performance, long-lasting, and cost-effective batteries is a key area of focus for automakers in 2025. Batteries are the heart of any electric vehicle, and improvements in battery technology will continue to shape the future of EVs. Companies focus on increasing energy density to improve range and reduce charging times. The trends shaping automotive manufacturing in 2025 emphasize innovation, sustainability, and connectivity.

🔮 Preparing for Tomorrow: Strategies for Industry Players and Consumers

Displays will also be a key driver of automotive technologies in 2025, from microLEDs to the production of holographic windscreens and smart glass. Belgian startup Apache Automotive develops the APH-01, a T3 prototype for extreme terrain. It combines a gasoline engine with an electric motor to enhance fuel efficiency and reduce emissions. Key players like Bosch, Continental AG, and ZF Friedrichshafen AG are investing in technological advancements. They are focusing on lightweight materials and improved energy recovery efficiency.

News + Insights

In 2025, we expect to see more automated and electric shared vehicles providing affordable, on-demand transportation. Autonomous driving is one of the most prominent applications of AI in the industry. It incorporates various AI-powered technologies like adaptive cruise control, automatic emergency braking, and lane-keeping assistance, allowing vehicles to navigate complex road conditions autonomously.

We evaluate our own startup data and complement these insights with external research, including industry reports, news articles, and market analyses.
Top car brands and dealerships are embracing VR as part of their dealership photography strategies to improve the customer experience.
It integrates electric drivetrains, transforming existing vehicles into sustainable and cost-effective alternatives to new EVs.
They shift the industry toward electrification, digitalization, and connected mobility.
Ransomware-related costs in the automotive industry skyrocketed from $74.7 million to $209.6 million in just the first half of 2023.
Integrating vehicle-to-everything (V2X) communication further improves connectivity and safety.
India-based startup DriveTech-AI builds solutions centered around optimizing the vehicle testing process through smart solutions.

By 2025, the sector is expected to experience continued technological advances, heightened sustainability efforts, and shifting market dynamics. In this article, we’ll explore the significant focuses of the automotive industry in 2025, ranging from electric mobility to autonomous driving and sustainability initiatives. One of the most significant shifts in the automotive industry is the widespread adoption of electric vehicles (EVs). The expected reach in 2026 is expected to reach nearly $62 billion at a growth of CAGR 22.75%.

Consumer Health in Brazil

The study offers data-based insights and recommendations for action for decision-makers in the automotive sector. Gain in-depth insights into the key developments that characterise the automotive industry. UK-based startup Distributed Additive Manufacturing (DAM) offers 3D printing services including design, building, and avoid overpaying thanks to plate lookup finishing of parts.

The integration of Industry 4.0 technologies is revolutionizing automotive manufacturing.
These advanced technologies are widely used across a great number of industries and the automotive domain is no exception.
Approximately 70 percent of industrial companies report faster chip supply, possibly due to weakened consumer spending and demand.
The continued global expansion of various players will require a strategic focus on supply chain efficiencies and may bring transformation and consolidation in the industry.
The global automotive semiconductor market is projected to grow from USD 53.57 billion in 2025 to USD 86.81 billion by 2033, with a CAGR of 6.22%.
Chip shortages have been causing myriad changes to trends that affect the automotive trends that are not all positive.
Our new report spotlights 10 connected vehicle trends to watch in 2026 that promise safer, smarter mobility and fresh revenue streams for automakers.

Summary – Automotive Industry

We expect to see the concept of Mobility-as-a-Service (MaaS) develop through 2025.
The big data market in automotive is growing, with a projected market size of USD 5.92 billion in 2024, expanding at a CAGR of 16.78% to reach USD 12.86 billion by 2029.
The data of all road users is streamed and processed in real-time to empower smart mobility.
From electrification to IoT connectivity, these shifts are changing the way cars are manufactured, sold, repaired, and driven.
As electric vehicles become mainstream, digitalization reshapes production, and mobility services redefine car ownership, the industry is set to transform how vehicles are manufactured and used.

Paul Marinelli gets straight to the point—exploring key trends and innovations shaping tomorrow’s mobility in just five minutes. 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. These cars even come equipped with Wi-Fi hotspots, ensuring easy Internet access for all passengers.

Still not the EV revolution once thought but still plenty of growth

By 2030, automotive industry trends 2030 will witness a significant shift towards electric and autonomous vehicles, driving sustainable growth in the car market. The infrastructure for EVs is expected to become more widespread and advanced, supporting the increasing number of electric vehicles on the road. Additionally, autonomous driving technology is set to dominate the industry, creating a safer and more efficient transportation system.

Most car buyers now consider a vehicle’s environmental impact before purchasing, with many willing to pay a premium of over £2,000 for greener emissions. In the Electric Vehicle Market, 2025 Will Be the Year of More – More Models, More Incentives, More Discounting, More Advertising, and More Sales Muscle. 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.

Technology in automotive industry forges ahead—the latest technological advancements are more and more extensively used by the domain.
Also, EV charging infrastructure requires strong cybersecurity, as attackers target charging stations for data theft or service disruption.
Big data and advanced analytics play a crucial role in decision-making throughout a vehicle’s lifecycle.
Several leading OEMs have already announced plans to adopt the chipset for their automotive solutions, including BYD, Nuro, XPENG, Volvo and Zeekr.
The auto manufacturers who rely on the older versions of chips which are not advanced and powerful will disrupt the growth of the automotive industry.
These systems aim to minimise human intervention, improve decision-making, and enhance overall efficiency, paving the way for smarter supply chain operations.

At the same time, a limited EV infrastructure and uneven policy application dampen the pace of meaningful progress throughout the region. When it comes to the benefits of connected cars, it seems that drivers are more willing to allow for data collection, too. The same report states that 68% of drivers believe car companies should collect personal data, but only 5% agree to unrestricted collection. Most favour an opt-in approach (63%), and many are willing to share data for benefits, with 67% open to lower insurance rates, 43% for personalised features, and 36% for improved safety options. As will be discussed later, with more data being collected for premium features, the inevitable concern for data security is raised, and cyber security threats loom overhead.

China remains dominant but new players are also making noise on the EV scene

Additive manufacturing shortens prototyping cycles, and IoT-driven analytics improve predictive maintenance.
The US-based startup Apex AI enables automotive companies to implement complex AI solutions.
It’s clear that a select subset of today’s consumers are willing to pay for high-end automobiles.
These over-the-air updates are becoming essential for ensuring vehicle reliability, safety and security, and are opening new revenue streams for manufacturers.

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. This ensures cybersecurity and reliability for engine control, powertrain management, and other mission-critical automotive applications.

Top 10 Emerging Automotive Industry Trends 2025 and Beyond

As per the traditional method, we used to visit the dealer and purchase vehicles from him, and the dealer used to make transactions with OEMs. However, as per the new Agency model, we will get to see that the people would directly be dealing with the OEMs and the dealer’s profit would be shared by OEMs. That will enhance in gaining the trust of society and the brand’s potential customers. Consumers thoroughly research their preferred car on their mobile phones, searching for the best offers and dealerships in their area. Therefore, websites must be easily readable and accessible on mobile devices, with clear calls to action. Brands provide specific offers by analyzing your needs, preferences, and behavior.

The SAE, originally the Society of Automotive Engineers, has identified six levels of automation on the path to completely autonomous vehicles. The scale established by these six stages is essential for comprehending and characterizing self-driving technologies, which span from complete human driving to complete vehicle autonomy. Through V2X, vehicles can share information about road conditions, accidents, and traffic patterns, allowing for real-time decision-making.

For this in-depth research on the Top Automotive Industry Trends and startups, we analyzed a sample of 4859 innovative automotive startups & scaleups worldwide. This data-driven research provides innovation intelligence that helps you improve strategic decision-making by giving you an overview of emerging technologies in the automotive industry. In the Automotive Innovation Map below, you get a comprehensive overview of the innovation trends & startups that impact your company. Vietnamese startup Phenikaa-X creates autonomous electric vehicles with AI and multi-sensor technology for safe transportation.

Forecasting Top 3 Automotive Industry Trends, 2030

Below, you get to meet 20 out of these 4859 promising startups & scaleups as well as the solutions they develop. These 20 automotive companies are hand-picked based on criteria such as founding year, location, funding raised & more. As battery technology and charging infrastructure progress, EVs lead the push toward sustainability. Sensor fusion that combines information from various sources improves safety and autonomy by enabling accurate decision-making. Indian startup ThinkSeed develops middleware solutions that enhance smartphone connectivity to vehicles for secure access and infotainment.