As the automotive industry moves into 2025, several trends are to reshape the landscape for manufacturers, drivers, and city planners alike.
From stricter urban policies to evolving in-car technology, these changes highlight a shifting focus on sustainability, convenience, and innovation.
According to the “Automotive outlook 2025: Trade spats hamper EV transition” report by the Economic Intelligence Unit(EIU) “New-vehicle sales will reach new highs in 2025, but trade wars will complicate the transition to electric vehicles.”
The report projects global new-vehicle sales to reach a record 97.2 million units in 2025, with car sales up 2% and commercial vehicles rising by 4%. EVs are expected to lead this growth, with sales climbing 16% to 19.4 million units, although trade barriers may restrict further expansion by raising prices and disrupting supply chains. Policymakers will continue pushing for lower emissions and congestion but may face consumer resistance, with the US election likely impacting the EV transition.
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Furthermore states that Western automakers will balance traditional and new technologies amid growing competition from China, while EV profitability is expected to improve as sales grow and commodity prices ease. Automation and AI will continue advancing in vehicles, though fully autonomous cars remain a longer-term prospect.
Here are three automotive market shifts set to define 2025 and the key developments to expect in the coming year.
Expanding city restrictions on emissions
Across the globe, governments are implementing measures to reduce traffic congestion and emissions in urban areas. A growing number of cities are preparing to establish zero-emission zones, where only electric or other emission-free vehicles are allowed. In a notable move, Stockholm, Sweden’s capital, will be the first to prohibit fossil-fuel vehicles in its city centre.
This step aligns with global efforts to curb pollution and promote sustainable transportation. Other cities are expected to follow Stockholm’s lead, placing pressure on automakers and drivers to adapt to increasingly strict emission standards.
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The rise of in-car subscriptions
As in-car technology continues to advance, automakers are experimenting with subscription models to monetise new features. These paid add-ons range from essential functionalities, such as smartphone integration, to advanced options like assisted driving and climate control adjustments. Audi’s latest A3 model, scheduled for a 2025 launch, will offer subscriptions lasting anywhere from one month to three years, allowing drivers to select features based on their needs and preferences.
Similarly, German car manufacturers Mercedes-Benz and Volkswagen are rolling out subscription-based services, including heated seats, high-level self-driving capabilities, and enhanced EV power. These options reflect a trend toward offering customisable vehicle experiences. However, whether drivers will be receptive to ongoing monthly payments for such features remains to be seen, as the subscription model raises questions about long-term affordability and customer satisfaction.
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AI-powered car assistants
Artificial intelligence integration in vehicles is set to become more prevalent, as carmakers strive to enhance user experience and functionality. Mercedes-Benz will introduce an AI-based “super assistant” in all its 2025 models, enabling drivers to interact more naturally with their vehicles. The AI assistant is expected to manage various tasks, from adjusting settings to providing on-demand information.
Meanwhile, Kia’s upcoming EV3 model will feature a voice assistant powered by ChatGPT, adding a new layer of interactivity for users. Volkswagen, which has already incorporated ChatGPT into its IDA voice assistant, allows drivers to control infotainment, navigation, and air conditioning through voice commands. BMW is testing a personal assistant based on Amazon’s Alexa large language model (LLM), designed to explain vehicle features and assist with in-car operations.
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