Groundbreaking New Technology in Automotive Industry in 2025

We analysed the 100 most important new product launches, services and innovations coming to the automotive industry in 2025 to derive technology trends across electric cars, AI and autonomous and connected driving.

New technology in automotive industry shaping the future of EVs, ADAS and Connected Cars

1. AI-Defined Vehicles to empower human-centric services and personalisation
2. Innovations in AI hardware for automotive to support suppliers building AI products
3. Unmanned factories and manufacturing digitalisation to boost vertical integration
4. The new battlefront in Autonomous Driving Software Stack: in-house vs. outsourced
5. AI and Generative AI to bridge the gap to Vision-based autonomous vehicles (Level 4)
6. The rise of Level 4 Autonomous Driver-as-a-service in robo-taxis and robo-trucks
7. Advancements in sensors, software and computing fuel the expansion of L2/2+ & L3
8. Software-defined vehicles will become the key differentiator in automotive
9. The race to create immersive in-vehicle experiences comes at a Premium
10. EV localisation strategies and ecosystem growth to succeed as competition intensifies
11. Closing the gap in EV charging infrastructure towards unified EV charging standards
12. Innovations in alternative powertrain technology are crucial to sustainable propulsion
13. Competition in energy storage and innovations could help make EVs more affordable

To learn more about opportunities in automotive, get access to our Opportunity Radar¹.

The most important new product launches and services coming in 2025

To derive opportunities, we analysed the top technologies in artificial intelligence, autonomous vehicles, electric cars, and connectivity in 2025.

In 2025, new technology in the automotive industry will feature AI hardware and software for autonomous driving and intelligent vehicles, solid-state batteries, flex-fuel hybrids, and modular EV platforms tailored for global markets.

Artificial Intelligence

Integration of AI in vehicles to empower human-centric services and personalisation

AI-Defined Vehicles In November 2024, XPeng showcased their latest P7+ sedan marking it as “the world’s first AI-Defined Vehicle”². What makes this vehicle different is the integration of AI to develop intelligent technologies across vehicle domains for premium passenger experiences.

XPeng’s P7+ integrates AI across the chassis, powertrain, driving system, smart cockpit, and XPENG’s AI Hawkeye Visual Solution, making intelligent driving an essential feature of the future mobility experience.

XPeng joins several automobile manufacturers, automotive suppliers and mobility players integrating artificial intelligence new technology in Automotive industry, such as Generative AI, NLP and Machine Learning.

Uber will launch an AI assistant for drivers in the U.S. powered by OpenAI’s GPT-4o in 2025.

Advancements in AI hardware for automotive to support suppliers building AI-enabled products

Arm and Intel’s new hardware solutions empower Tier-1 suppliers and OEMs to build AI-enabled products, promoting a decentralized ecosystem. New technology in automotive industry includes AI-automotive GPUs and chiplets.

³GPU Advancements: Intel’s Arc Graphics for Automotive marks a leap in automotive AI performance, enabling real-time processing for intelligent cockpits and immersive user experiences.

Automotive Chiplets: Arm’s Compute Subsystems (CSS) for chiplets accelerate the development of AI-driven vehicles, emphasizing modularity and faster iteration cycles for automotive electronics.

Digitalization in Manufacturing to boost Vertical Integration

BMW’s iFACTORY employs NVIDIA’s Omniverse platform to create a digital-first manufacturing process.

Denso’s commitment to a 24-hour unmanned operation facility highlights the use of robotics and digital twins to optimize efficiency, ensuring minimal human intervention while meeting future production demands.

Autonomous Driving New Technology in Automotive Industry in 2025

The new battlefront in Autonomous Driving Software Stack: in-house vs. outsourced

Unique software capabilities become key differentiators in a crowded market. Competition in AD-SW Stack is getting stronger because it’s a key enabler to achieving and monetizing autonomy.

Automakers follow three strategies in Autonomous Driving Software:

• developing software in-house to retain control and differentiation
• or outsourcing to tech partners to accelerate development and manage complexity.
• or a hybrid approach mixing the two approaches

Automakers are focusing on in-house and partner-led software development to customize and optimize autonomous driving.

Tesla, Mercedes-Benz, BMW, XPeng, Toyota are developing in-house expertise to leverage the benefits of full customisation with specific vehicle performance and brand identity, reduced dependency on external licensing fees and partnerships and seamless updates to improving the user experience over time. However, the face high upfront R&D costs, talent shortages and complexities in scaling.

General Motors, Volkswagen, Volvo (ecarx), Hyundai, Jaguar Land Rover (NVIDIA) are among the automakers following an outsourced development strategy. This strategy could enable faster time-to-market, cost-savings and flexibility in selecting state-of-the-art components.

The rise of software-defined platforms like Ecarx’s Cloudpeak and SiEngine’s AD1000 chip is driving innovation in autonomous driving stacks.

AI and Generative AI to bridge the gap to Vision-based autonomy

The integration of AI is bringing innovations in Autonomous driving, from Level 2-3 ADAS (XPENG vision-based ADAS without Lidar), to take-over control (Waymo) and traffic monitoring (SoftBank Group Corp.).

XPeng is among other carmakers (Baidu, Inc.–JIDU Auto, and Tesla) exploring Lidar-less, vision-based Autonomous Driving with their “AI-Defined Vehicle” P7+.

Plus SuperDrive Level 4 self-driving software built on Generative AI and open foundation models will be ready for driverless operations in 2025.

Waabi to Bring the First Generative AI-Powered Trucking Solution, Built on NVIDIA DRIVE Thor, to Market.

Expansion of Level 3-4 autonomous driving in cars and trucks

By 2025, Level 4-Autonomous driving will transition from pilot projects to scalable deployments, shaping the future of mobility and transportation ecosystems globally.

Automakers like Honda, Mercedes-Benz, and XPENG are pushing boundaries with advanced Level 3 (cruising autonomy).

New technology in automotive industry from the likes of NVIDIA (DRIVE Thor) and partnerships with firms like Momenta and Helm.ai enable significant leaps in capability.

Aurora and Waabi are pioneering autonomous truck solutions, targeting commercial deployments by 2025. Scania’s mining trucks and Continental’s autonomous agricultural robots showcase non-passenger use cases for autonomous technologies.

Next-generation Sensors for better performance and efficiency

Next-gen sensors like 4D imaging radar (Arbe chipset) and high-performance lidar (Hesai for Leapmotor) improve detection accuracy and range. This new technology in automotive industry is critical for enabling safer and more reliable autonomous functions.

Read the 10 biggest opportunities in Autonomous Driving in 2025.

Connected Cars

Software will become the key differentiator among automotive players

Partnerships to make all vehicles “Software-Defined”, i.e. always up-to-date and manage complexity are on the rise. New Technology in Automotive Industry in 2025 includes new automotive processors to support immersive experiences, automotive digital twins and more.

Hyundai’s SDV Transformation: Hyundai’s ambitious roadmap aims to make all its vehicles SDVs by 2025, enabling over-the-air (OTA) updates for functionality upgrades. This strategy emphasizes Hyundai’s commitment to creating vehicles that can evolve with user needs, making hardware a foundation for long-term software services.

JLR’s collaboration with NVIDIA DRIVE for SDVs focuses on AI-powered safety and autonomous features. This partnership highlights the growing trend of automakers teaming up with tech companies to develop robust SDV platforms.

Immersive Passenger Experiences

Create immersive In-vehicle experiences: Connected services, such as advanced IVI systems, create personalized and immersive experiences for drivers and passengers.

Hyundai’s adoption of Samsung’s Exynos Auto V920 processor for its next-generation in-vehicle infotainment (IVI) systems is a step forward in delivering high-performance, immersive driving environments. With this new technology in automotive industry, Hyundai’s vehicles will remain competitive in connected car experiences.

Electrification trends in 2025

Electrification technology in automotive industry to power efficiency and affordability includes Solid State Batteries, Alternative Powertrains and ultra-fast EV Charging.

Affordable Electric Vehicles on the Horizon

Suzuki-Toyota Collaboration: Suzuki will manufacture a nimble BEV SUV for Toyota at its Gujarat plant in India starting in 2025. Featuring a 4WD system, this model underscores Toyota’s focus on leveraging Suzuki’s cost-effective production capabilities to expand in emerging markets.

BMW Vision Neue Klasse: BMW’s next-generation electric platform emphasizes computing power and efficiency, with its iX3 crossover leading a series of innovative BEV models.

Affordable BEVs on the Horizon: According to Goldman Sachs, battery prices are projected to fall nearly 50% by 2026, potentially bringing EV ownership costs in line with gasoline cars. Advances in battery chemistry, such as cell-to-pack technology and higher energy density, are accelerating this shift.

Localization strategies in China and Europe

Brands are tailoring products for regional markets, such as Toyota’s flex-fuel hybrids for Brazil and BYD’s dealership expansion in Japan. These strategies ensure relevance in diverse regulatory and consumer landscapes.

Audi’s focus on the Q6L e-tron for the Chinese market underscores the importance of localized strategies in EV adoption.

Solid State Batteries

The falling cost of lithium-ion batteries and breakthroughs in solid-state and nuclear battery technologies drive competition and innovation in energy storage. The advancements of SSB technology in automotive industry is critical for improving EV performance and reducing costs.

Nissan believes all-solid-state batteries can be reduced to $75 per kWh in fiscal 2028 and to $65 per kWh thereafter, placing EVs at the same cost level as gasoline-powered vehicles.

Ilika’s shipment of prototype Goliath solid-state batteries to an automotive customer marks progress in battery energy density and safety. Expected to enter the market by 2025, these batteries promise significant efficiency gains.

Alternative Powertrain New Technology in Automotive Industry

Solutions like Toyota’s flex-fuel hybrids and MAN’s methanol retrofits offer transitional pathways to sustainability by diversifying powertrain options, catering to markets where full electrification faces infrastructure or cost barriers.

Toyota’s Hybrid-Flex Strategy in Brazil: Toyota’s $2.2 billion investment in flex-fuel hybrids underscores its commitment to region-specific solutions. Hybrid-flex vehicles that run on ethanol or gasoline are tailored for Brazil’s energy landscape, balancing electrification with fuel flexibility.

Methanol Retrofits for Commercial Vehicles: MAN PrimeServ’s methanol retrofit packages for diesel engines represent a step toward alternative fuels. By enabling dual-fuel operations, this innovation caters to commercial fleets looking for sustainable solutions.

Hydrogen Mobility

Toyota: The Mirai, already in its second generation, will receive updates in 2025 to improve range and performance.

Hyundai: The NEXO SUV continues to lead the hydrogen passenger car segment, with the next generation expected in 2025.

BMW: The company’s iX5 Hydrogen SUV will move beyond pilot testing to limited production.

Chinese Automakers: Companies like Great Wall Motors and Geely are expected to enter the hydrogen market with affordable FCEVs.

Nikola Motors plans to launch its Tre FCEV in the U.S. and Europe.

Hydrogen-powered buses from Toyota, Ballard, and Van Hool will be deployed across urban transit systems in Europe and Asia.

Close EV charging infrastructure gaps towards unified EV charging standards

Volvo and Tesla Superchargers: Volvo’s integration with Tesla’s North American Charging Standard (NACS) provides access to over 17,800 Tesla Supercharger stations. Starting with the 2025 model year, Volvo’s EX90 flagship will ship with NACS adapters.

Volkswagen and Electrify America: Volkswagen’s partnership ensures three years of discounted charging for ID. Buzz customers.

Cross-Adoption of NACS: Automakers like Toyota, BMW, and Mazda are aligning with Tesla’s NACS, creating a unified standard in North America to simplify charging for consumers.

The EU plans to add 1,000 hydrogen refueling stations as part of its hydrogen roadmap, with Germany and France leading deployment.

United States: California is targeting 200 hydrogen refueling stations by 2025, with expansion plans in other states like Texas and New York.

The expansion of green hydrogen production and refueling infrastructure could accelerate the adoption of new technology in the automotive industry, particularly in regions focused on sustainability.

By 2025, new technology in the automotive industry will include AI hardware and software for Level 4-Autonomous driving, intelligent cockpits, electrification.

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