FRM 2025: Sector Report Automotive Industry KPMG in Germany

These all-inclusive options reduce the financial burdens of ownership, especially for urban users. Vehicle cybersecurity drives one of the fastest-growing areas in the auto industry as connected vehicles multiply and cyber risks intensify. Analysts project the automotive cybersecurity market to increase from USD 5.24 billion in 2025 to approximately USD 18.88 billion by 2034, advancing at a CAGR of 15.3%. Geopolitical risks, regulatory frameworks, cost advantages, and compliance needs drive the auto industry toward supply chain resilience and nearshoring.

• Battery improvements reduce costs and increase range, making EVs more accessible.
• This enables an all-inclusive model that replaces ownership with monthly flexibility.
• The US-based startup Apex AI enables automotive companies to implement complex AI solutions.
• Almost 40% of all autonomous vehicles sold in 2025 are predicted to have L2 ADAS features.
• For our trend reports, we leverage our proprietary StartUs Insights Discovery Platform, covering 7M+ global startups, 20K technologies & trends, plus 150M+ patents, news articles, and market reports.
• This centralization allows faster product cycles, OTA updates, and cross-domain features.

🤔 Uncertain Market Acceptance and Consumer Adoption of New EV Tech

When demand for cars plummeted in the early days of the pandemic, auto manufacturers stopped ordering them and chip producers focused their attention elsewhere. The global automotive parts market has been steadily growing for the past twenty years. Europe now is the largest market for new plug-in electric vehicles, overtaking China’s first spot.

SWYTCHD offers EV Subscription

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. 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 Innovative Armor PowerFlex 330 Drive Motor For Warehouse Applications

It is also integrated into fleet management dashboards and security operations centers (SOC). US-based startup MotionSafe provides AI-powered cybersecurity solutions that protect connected vehicles from data breaches and cyber threats. 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. Motoreto strengthens supply chain resilience in the auto industry and drives nearshoring by aligning distribution, procurement, and sales with regional market needs. The startup enables dealerships, fleet managers, and manufacturers to manage inventory strategically.

Cars have become even more connected

Waymo highlights this in its robotaxi fleet, which processes multimodal data to complete over 250K paid rides weekly with high reliability. Tesla’s Full Self-Driving Computer processes high-rate image input, handling camera streams of up to approximately 2.5 billion pixels per second through its camera serial interface. Its image-signal processor manages approximately 1 billion pixels per second from high dynamic range (HDR) sensor inputs. 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.

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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%. Volkswagen’s Traton Group, recognising the urgency of addressing these bottlenecks, is planning a third battery assembly plant in Europe. The move highlights the scale of investment required to meet zero-emission vehicle targets and align with regulatory pressures for decarbonisation.

Advanced Safety Features

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 upcoming automotive industry trends refer to evolving changes in patterns within the sector that influence vehicle design, production, marketing, and usage. Technological advancements, along with changing consumer preferences, regulatory changes, and global economic conditions, are driving these trends.

Methodology: How We Created the Automobile Trend Report

The used car market is also expected to become more important for consumers looking for cheaper EVs, which typically face greater levels of depreciation than internal combustion engine vehicles. However, used electric powertrain vehicles are still few and far between, with the Society of Motor Manufacturers and Traders, in the UK, suggesting EVs make up 2.7% of the total used car market. These solutions decrease fleet wait times and cut pollution from petrol or diesel vehicles.

• Monitoring and understanding these trends is crucial for automakers, suppliers, and other stakeholders to stay competitive.
• Discover how these shifts improve charging, safety, and sustainability and what they mean for your business.
• While there are a lot of opportunities ahead for the industry, there will be plenty of challenges like cost pressures, growing competition, and globalization.
• People are shifting to EVs because of their design and their being environmentally friendly.
• Automakers move from fleets of electronic control units (ECUs) toward centralized computing platforms that run multiple domains on Systems on Chip (SoCs).
• From encrypted communications to intrusion detection systems, cybersecurity advancements will ensure consumer trust as vehicles become smarter and more networked.
• Additionally, CARNIQ Technologies supports the automotive sector with threat analysis, cybersecurity management, and secure system development.

🌐 Trend 4: Global Supply Chain Resilience and Geopolitical Shifts

However, it’s estimated that there will be 33 million autonomous vehicles on the road by 2040. Virtual car shopping is the new norm and will remain a significant car industry trend for years. The booming e-commerce industry is essential to the global online car buying demand. This is further fueled by increasing awareness of convenience and supported by rising digital literacy, internet accessibility, urbanization, and disposable income levels.

Sustainability, regulations, and supply chain challenges in automotive manufacturing

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.

Explore the most important trade fairs and conferences to boost your business success. Contact Avenga today to learn more about what industry experts have to say about these trends. For instance, China has introduced policies encouraging automakers to procure up to 25% of their chips domestically by 2025, reducing reliance on foreign suppliers.

Charge Your Porsche Cayenne Electric Like an iPhone

Software-defined vehicle (SDV) architectures are revolutionising automotive technology, with electric models often leading this digital transformation. While traditional OEMs are adapting to this shift, we are also witnessing newer market entrants are making significant strides in implementation, which is making for a more competitive automotive sector. Road safety, regulatory mandates, autonomous vehicle adoption, and smart city development drive this innovation.

• This increases the regulatory push toward connected and safety-enhanced vehicles.
• This approach enhances flexibility across its global operations, ensuring a rapid response to shifting market demands.
• Self-driving vehicles are becoming increasingly common and will continue to do so in 2025.
• Software-defined vehicles redefine business models through centralized computing and OTA upgrades.
• Toyota’s North Carolina battery plant exemplifies this commitment, with operations fully powered by renewables.
• 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.
• 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.
• The solution captures millions of data points in real time and analyzes them to enable lenders to instantly assess and reduce risk.

This coordinates power flows between vehicles, buildings, and distributed energy resources. Also, IoT sensors such as LiDAR and radar expand perception by generating environmental data. For instance, Audi and BMW vehicles exchanged sensor data, including camera feeds, during 5G-V2X Direct demonstrations in Berlin. This data alerted drivers to pedestrians and cyclists before they became visible.

Toyota’s Legendary Hilux Is Going Electric

More than 12% of consumers who financed a new car in June of 2022 had a monthly payment of $1,000 check truck specs instantly with a VIN decoder 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. According to a study completed by INRIX Transportation, Honolulu, New Orleans, and Nashville are the three US cities that stand to gain the most from micromobility vehicles. Tesla reportedly rewrote the software it uses in its vehicles so they could run on a different type of chip.

Automakers reduce reliance on distant suppliers as trade tensions and conflicts expose the fragility of global networks. Also, advanced battery management systems improve safety, extend battery life, and optimize performance. Automakers integrate these systems to offer more reliable vehicles across global markets. In 2024, EV sales reached 17 million units, accounting for over 20% of global new car sales. Also, the EV market is projected to reach USD 6.16 trillion by 2035 at a CAGR of 25.32%.

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. Its RC ONE driverless vehicle combines proprietary software and hardware with automotive-grade components to achieve low-speed autonomous operation.

• Modernized and upgraded vehicles with much more technology allow a thunder growth for the markets providing parts of the vehicles.
• While regulatory hurdles remain, 2025 will likely see significant progress in integrating these services into urban infrastructure, offering consumers affordable, sustainable alternatives to owning a car.
• BOS Semiconductors focuses on high-performance, energy-efficient AI solutions to drive innovation in autonomous driving and enhance in-cabin experiences.
• Advances in solid-state batteries promise higher energy density and faster charging times, while the expansion of ultra-fast chargers addresses key barriers to EV adoption.
• Autonomous driving will continue progressing from Level 2+ driver-assist to Level 3 conditional autonomy in geo-fenced areas.
• In the US, the CHIPS and Science Act allocates USD 52.7 billion in funding and offers a 25% investment tax credit.
• Even with this rapid growth, EV’s share of cars on the road is expected to remain at just 8% by 2030.
• Self-driving vehicles rely on artificial intelligence (AI) and machine learning algorithms to process real-time data from cameras, sensors, and radars.

Cost efficiency strengthens the case, with Mexico offering a 35% landed-cost edge over China in 2022. And it is projected to widen to 45% by 2030 due to lower labor and freight costs. The startup enables automakers to reduce waste, optimize design processes, and advance sustainable manufacturing strategies.