Evolving consumer demands, the ever-growing urgency to battle climate change, and the seismic shift in the mobility technology space are just some of the most significant changes transforming the current automotive world. We are just a couple of months into 2025, so to assert something with absolute certainty would be naïve.
However, going by the trends driving the change in the automotive world, we are sure that the future of mobility features many electric vehicles (EVs), autonomous driving, and artificial intelligence (AI) taking center stage. If that excites you, welcome to our latest blog on automotive industry trends in 2025.
We have spoken to global automotive leaders to capture the market’s pulse and accurately pinpoint the key insights that will help automakers drive the future of mobility. While taking a closer look at the future trends, we will also share some of the glaring challenges that the automakers of today are facing, as well as the secret ingredient to keep you ahead of your rivals in the race to conquer the mobility world. So come along for an exciting ride into the future of automotive.
The Current State of Automotive/Mobility Industry
According to a recent study, the global automotive market is expected to be worth over $9 trillion by this year’s end. The transition away from traditional internal combustion engines (ICE)—which will always hold a special place in the hearts of petrol heads—to more advanced, cleaner, smarter, and quieter vehicles will be driven primarily by electric vehicles, autonomous driving technologies, and mobility-as-a-service (MaaS) models.
While we still have a long way to go before intelligent engines takes over the ICEs, today’s automotive industry is no longer only about manufacturing good-looking, fast, muscular cars. Modern customers demand feature-rich, digital-first vehicles that not only can slot perfectly into the size of their palms but also address their sustainability concerns.
To cater to such a demanding consumer base, automakers, suppliers, and stakeholders will need all the help they can get if they are to survive. Businesses that fail to adapt to the customer’s evolving needs risk becoming obsolete in an industry that has always been about innovation and agility. If you’re looking to stay afloat and thrive in the modern automotive world, let us give you some key insights & trends that will drive the future of mobility.
Automotive Industry Trends 2025
Here are some of the noteworthy automotive trends that we feel will shape the future of the mobility industry –
Sustainability & Elective Vehicles (EVs) Take Centre Stage
Sustainability is the operative word for businesses these days. Every business is looking to find sustainable solutions for all their business needs. The automotive industry is no different. The monumental rise of hybrid and electric vehicles is a clear sign of the direction the modern automotive industry is headed.
While hybrid cars, with the goodness of traditional ICEs blended with a battery pack, are the preferred choice for customers looking to strike a balance between sustainability and raw power, pure EVs are for the purists. According to a study, by 2025, EVs will account for over 20% of global vehicle sales, with falling battery costs, government incentives, and growing consumer awareness of environmental issues being the key driving force.
Every automaker in the current market has a hybrid or EV offering as part of their lineup, with Tesla, Volkswagen, and General Motors being the flag bearer of the change. Another key trend transforming the automotive industry is the shift in focus toward carbon-neutral manufacturing and recycling programs for EV batteries. This can also be a key focus of automakers around the world.
Rise of Autonomous & Software-Defined Vehicles (SDVs)
According to recent reports, vehicles’ level 4 autonomy (highly automated driving under specific conditions) can become commercially viable by as early as 2025-end. With manufacturers like Waymo, Cruise, and several other traditional automakers testing self-driving vehicles in urban environments aggressively, we are on the cusp of seeing the rise of autonomous and Software-defined vehicles (SDVs) among mainstream automotive fans.  
Several concerns have been raised regarding the safety and functionality of software managing steering, braking, and other critical parts of the vehicle. However, automakers are sure that autonomous cars will become even safer in the coming years with the latest advancements in AI and computing power.    
According to recent reports, the Software-Defined Vehicle (SDV) market is expected to grow to 7.6 million units in 2025 from 6.2 million units in 2024. Many major tech giants are entering the autonomous vehicle race with offerings such as ADAS, electrical/electronic (E/E) architectures, and cloud computing solutions. All these solutions, along with advanced IoT sensors and 5G connectivity, will transform your overall driving experience.
With their advanced computing powers, these vehicles will have the capabilities and infrastructure to communicate with each other, get real-time traffic updates, predictive maintenance, and enhanced safety features. If everything goes as predicted, we will soon be walking among the transformers.
Driverless Cars to Become Reality
While autonomous and software-defined vehicles (SDV) will transform your overall driving experience, with the arrival of Level 4 autonomy (highly automated driving under specific conditions), we will get the true driverless car experience. And however, the automotive industry is still transitioning from L2 to L2.5 and L3, we aren’t very far away from L4 implementation. We already have companies such as Baidu, Pony.ai, and WeRide carrying out full-fledged road testing across multiple cities.
By the end of year 2025, nearly 40% vehicles across North America are expected to get L2 ADAS capability with Mercedes Benz leading the pack by commercializing their DrivePilot system. We expect the other German manufacturers to follow the suit soon. With full cooperation from the regulatory authorities and government OEMs can accelerate their L2 and L3 testing and pave way for L4 to foray into the picture.
Challenges of Modern Automaker
While technology has made life easier and smoother for automakers, it has also presented them with challenges never seen before. Some of the most prominent challenges of modern automaker include-
Semiconductor Shortages and Supply Chain Constraints
With the race to win the AI war heating up, the global manufacturing industry is experiencing a severe shortage of semiconductors, which is significantly hampering production lines. This shortage also tests the limits of the current supply chain ecosystem. The ongoing supply chain issue forces automakers and other manufacturers to resort to alternative strategies, such as vertical integration and strategic stockpiling, to mitigate future risks.
Sustainability vs. Cost Challenges
Sustainability has a cost attached to it. This is a widespread fact, with every industry struggling to balance adopting sustainable business practices and keeping costs low. It’s no different for automakers. They, too, want to adapt and invest in green technologies, but they struggle to maintain consumer affordability. This is where a little helping hand from the governing bodies can significantly help the manufacturers.
Adapting New Business Models: Subscription and Mobility-as-a-Service
Every now and then, we see a business model rise that completely transforms the industry. The emergence of subscription-based models and MaaS platforms is one such instance for the mobility industry. With major auto giants such as Volvo and BMW offering vehicle subscriptions, alongside ride-hailing startups like Uber and Lyft leading the charge in shared mobility, we can expect these models to become mainstream, with more and more automakers offering the same to lure their customers.
How Datamatics Business Solutions’ Insights are Helping Automakers?
Datamatics Business Solutions, with its rich pedigree of over four decades in delivering holistic business research and market intelligence backed by concrete data and a team of 500+ market researchers, helps automakers navigate industry disruptions and capitalize on emerging opportunities.
Our unique market research methodology is supported by industry-specific data sets, enabling us to monitor the evolving market trends and produce insights instrumental in driving sustainable growth in an evolving automotive landscape. If you’re an automaker looking for bespoke market research for your product development, market expansion, or just customer segmentation, write to us at [email protected], and we will have our experts reach out to you in a jiffy.
Somnath Banerjee
