What’s driving the automotive industry in 2025?
Author : Cecile Loison, Ken Horne, Keysight Technologies
19 March 2025
Ken Horne, Strategic Planning Manager, Software Defined Vehicle Solutions, Keysight Technologies
In the first of our series of 2025 outlooks by Keysight Technologies, Cecile Loison [CL] and Ken Horne [KH] consider 2025 trends in the automotive sector.
1. Autonomous driving reality check [KH]
Vehicles produced today have varying levels of autonomy, with most cars having level two or two-plus features and some high-end cars having level three features. However, safety concerns regarding autonomous driving remain in the spotlight. This is resulting in the acceptance of more incremental developments in advanced driver-assistance systems (ADAS), rather than pushing for full autonomy. ADAS uses automated technology, including sensors and cameras, to detect nearby obstacles or driver errors and respond accordingly, improving car and road safety. ADAS is increasingly viewed as a catalyst towards full autonomy, which is widely accepted as a long-term goal.
2. Software-defined vehicles starting to gain traction [KH]
The transition to electric vehicles (EVs) is helping to drive the adoption of software-defined vehicle (SDV) architectures, as electric models frequently utilise these platforms. Integrating SDV capabilities with electric vehicles can help to accelerate the penetration of both technologies in the market. However, traditional OEMs are struggling to implement software-defined vehicles, while newer entrants have made progress.
One critical challenge to overcome is consumer acceptance of shifting from the established "pay once for the car" model to the subscription-based model which provides recurring software updates and new features. These software updates are necessary to ensure the reliability, safety, and security of the software-defined systems which will foster widespread adoption. For OEMs, the ability to add new features and capabilities to vehicles through over-the-air software updates presents opportunities to generate new recurring revenue streams, while keeping vehicles up to date. The next few years will determine the impact of SDV on the auto industry.
3. Smart vehicles and 5G/6G wireless networks [KH]
Despite the initial hype around 5G, the auto industry has gradually embraced the wireless network. As 5G and then 6G become more ubiquitous, over-the-air software updates and the ability for vehicle features to be added post-production will become a reality. A telematics control unit will be essential to support these updates and services.
4. EV state of adoption [CL]
The deadline for phasing out the sale of CO2-emitting combustion engines is now less than a decade away in some regions, and progress toward this milestone varies. The European Union has been leading the way, while China has focused on mass-producing small, affordable EVs and is now the world’s biggest producer. In the US, progress is slower, with the adoption of hybrid vehicles preferred until the charging network is fully established and battery technology is more mature. This is also limiting the adoption of EVs in industries like long-distance trucking which are responsible for significant CO2 emissions.
5. Mobility as a Service pivots to grid cities [KH]
Cecile Loison, Strategic Planning Manager, Electric Vehicle & Energy Solutions, Keysight Technologies
Mobility as a Service (MaaS), which integrates various transportation forms and services into an on-demand service, has long been touted as the future of transportation. After several false starts, the strategy has shifted to focus on deploying mobility-as-a-service models in simpler, grid-like cities like Phoenix, Milton Keynes, Vienna, Helsinki, and Singapore, before expanding to more complex urban areas like San Francisco, London, Paris, Tokyo, and Hong Kong. Extensive testing incorporating digital twins will be critical to the success of these initiatives.
6. The EV industry explores the circular economy [CL]
With combustion engines being phased out to help reduce emissions, the auto industry will explore the potential for recycling and repurposing lithium-ion batteries. Europe and China, with their extensive recycling infrastructure, will lead the charge. In other regions, it will be more challenging to adopt circular economy principles, and progress may stall.
7. The automotive industry turns to AI [KH]
AI will increasingly be used to tap into the vast volumes of data that vehicles now generate to improve the design and performance. However, until concerns around the safety and reliability of AI are addressed, it will limit adoption. To help resolve these issues, car manufacturers will use AI to verify that the AI algorithms used in autonomous driving software are safe and trustworthy. This will give rise to the need for a squad of AI traffic cops to help police the auto industry's use of AI.
8. The road ahead is littered with renewable energy challenges [CL]
Renewables still have limitations to overcome before they can be widely adopted. In particular, the inability to store energy for industrial use, and the need for a mix of energy sources, will limit progress. Hydrogen’s versatility as an energy carrier and its ability to decarbonise will drive research into exploring how it can help to support the transition to a clean energy economy.
9. Battery technology making progress [CL]
Despite much progress and innovation, battery technology is still not at the point of mass production, and requires continued testing and improvement. The focus will be on evaluating new battery chemistries with the goal of improving their power, weight and/or cost capabilities. Innovation-driven improvements are foreseen in battery pack design and manufacturing processes across the value chain. New battery technologies and cell chemistries are challenging the test requirements and methods, integrating more advanced Al algorithms and predictive data analytics.
Contact Details and Archive...