Auto industry is one which is constantly changing to satisfy the demands of consumers, technological advances, innovative creations, comfort & luxury, and, most importantly, ever-lasting competition among motor companies in order to edge out the competition.
The automotive industry should capitalize and make the most out of emerging crazes by addressing different trends that come up with time. These automotive trends determine the dynamics and overall structure of the industry.
Are you curious which automotive trends, innovations, and challenges will impact the associated businesses, customers, and the whole ecosystem? We have curated an article that shows the top 10 automotive trends, innovations, and challenges to watch out for in 2023.
Stick till the end to find out the details that could affect you, your business, and the overall automotive industry so that you can plan your business accordingly and make the most out of such trends.
Top 10 Automotive Industry Trends in 2023
1. The rise of Electric Cars with Digital Technology
The environmental impact caused by using fossil fuels like petrol and diesel and, more importantly, the depletion of such resources calls for introducing electric vehicles.
The mass acknowledgment of the deterioration of nature while mining fuels and its aftereffects of the usage is the main reason for the rise of electric vehicles (EV) in recent years.
Various motor companies around the globe have felt the need to create powerful EVs to meet the demands of consumers. Also, they have realized the necessity of EVs for better sustainability and conservation of the planet.
Still, there are a lot of challenges that are restricting the mass adoption of electric vehicles globally. Some major challenges include high upfront payments for purchase, lack of adequate charging spots/infrastructures, fleet electrification, poor battery, powering renewable energy-based charging grids, and more.
If the motor companies can overcome these challenges and supply affordable EVs to consumers, the whole plane will set its course to self-heal from the past destructions.
We can hope to see the rise of EVs in 2023 and in the years to come after. Many motor companies around the globe like Lucid Motors, Waymo, Hyliion, Ztractor, Piaggio Fast Forward, ChargePoint, Envoy Technologies, and more are concentrated on building EVs.
The competition among the motor companies will (definitely) give rise to EVs with the latest techs and advanced features globally.
2. Autonomous Vehicles (AVs)
Self-driving cars aren’t news to our ears in 2023, with companies like Tesla and Google already exhibiting their self-driving or autonomous cars in 2014.
The most promising autonomous vehicles in 2023 are from Tesla, with a significant jump in the game and publicizing self-driving cars with full functionality. However, the company still suggests active driver supervision on Autopilot-Tesla for unseen circumstances.
They have several challenges and limitations despite their autonomous features. These autonomous cars can only self-drive in (specific) regions like the US and the UK. And what about the off-road routes?
But we can hope to see autonomous vehicles growing all over the globe soon in the future with the advancement of AI and ML from Tesla and other innovative companies. For instance, Intvo, a US-based startup, devised a pedestrian demeanor prediction technology for the safety of (both) AVs and pedestrians.
Tesla, Cruise, Aurora Innovation Inc (AUR. O), and Alphabet Inc’s (GOOGL. O) Waymo, along with other startups, are some promising companies that are actively involved in making autonomous vehicles a reality in the future. There is a huge possibility that soon, self-driving automobiles will take over transportation.
3. Incorporation of Artificial Intelligence
We introduced advanced features and digital technologies in the sections above, which are possible by incorporating AI in vehicles. AI includes components such as Machine Learning (ML), Deep Learning (DL), and Computer Vision, performing various robotic automation in the automotive enterprise.
The AI helps motor companies and consumers manage fleets, guide autonomous vehicles, improve safety for drivers, and assist in vehicle inspection or insurance. The companies can accelerate mass production while maintaining top-notch quality and reducing manufacturing costs.
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However, implementing AI in the automotive industry is not for normal people, and it requires a qualified workforce, high data security, expensive infrastructure, software, and other complexities. The major challenge of all is localizing the AI to meet the needs of the general market with different demographics, languages, and cultures.
Despite the challenges, we will see the elevation in the use of AI in the automotive industries in 2023 and years ahead. The investment of motor companies and other Tech companies in AIs will change the dynamics of the automotive industry.
4. Refinement in Big Data & Analytics
Incorporating AI in the automotive industry expands the horizon of possibilities, especially for the motor companies and, to some extent, for the consumers. Companies can easily collect data from every vehicle in various categories and analyze them to figure out patterns, issues, and improvement sectors.
Big Data and Analytics can help motor companies analyze their existing models, work on their inferior components, and improve them with significant updates and upgrades. It facilitates predictive maintenance, fleet information to managers, swift alert to authorities in case of misfortunes, and other product enhancement indicators and opportunities.
However, companies require a skilled set workforce to get the most out of such analytics and properly develop plans and designs to enhance the existing features. Companies need to invest more in infrastructure and workforce that add up to the product’s final cost affecting the consumers.
Reducing the product cost despite the challenges is the biggest challenge of all. Still, we can predict the use of AIs to power up and refine Big Data & Analytics in the automotive industry no matter what.
5. Smart Human-Machine Interface (HMI)
The future cars or vehicles will come with a futuristic approach to human-machine interaction and will not remain the same after a few years. The drivers and passengers can have a seamless vehicle experience and enjoy the rides like never before.
The AIs and innovative vehicle programs will change the automotive landscape and how drivers interact with the vehicle. Voice controls and haptic feedback will change the manner of controlling the car on the drive.
The challenge here is to generalize the HMI to facilitate user bases from diverse regions, and different geographic landscapes require customized settings to address the demographic standards.
Many techs and motor companies are combining forces to solve these problems for general purposes. For instance, Apostera, a German startup acquired by HARMAN, specializes in Advanced Driver-Assistance System (ADAS), combining Augmented Reality (AR), viewing monitors, and smart cameras to alert drivers of curves, the route turns, and complex junctions.
We will see a futuristic development in the HMI in the future despite limited applications at present. Many companies are in the race to create better HMI than others, propelling the advancement of Smart HMI.
6. Use of 3D Printing
We will see a massive impact of 3D printing in the automotive industry in 2023 and in the years ahead. It simplifies the task of motor companies in various ways.
Prototyping can be effective and less time-consuming as companies can print customized motor parts easily and comparatively fast to accelerate the prototyping.
The other benefit of 3D printing is that repairing and replacing damaged auto parts become easily accessible since they can print any spare part to meet their requirements. Customers can also take advantage of this approach as they do not need to spend on the package deals of spare parts.
Finally, motor companies can build proven motors with 3D printing that are durable, strong, and lightweight. The carbon fiber products are more reliable, affordable, corrosion-resistant, and dimensionally stable, making motor cars even better.
The downside of this approach is companies either need to invest in the 3D printers, which are expensive and require a dedicated workforce, or outsource their work, increasing the chance of complexities and security issues.
Despite these challenges, we shall witness the increment of 3D printing in the automotive industry.
7. Growth of Shared Mobility
The traditional approach to owning a motorcar will gradually fade away with time in the future as better alternatives and possibilities arise with connected vehicles. New business models will give rise to Shared mobility, allowing consumers to share their commute and not own.
This approach will reduce the number of vehicle production, which has a positive impact on the environment. For instance, Launch Mobility hosts station-based car sharing, shared dockless scooters, peer-to-peer shared mobility, and advanced shuttle services.
Other companies like Getaround, EasyMile, Bolt, Cabify, Lime, and many others have successfully offered Shared mobility services to the general public all over the globe.
Depending upon the circumstances, it may face challenges like theft, damages, unpaid rides, unauthorized usage, etc. However, these challenges aren’t big enough to disrupt the growth of Shared Mobility globally.
8. Enhanced Vehicle Connectivity
In 2023, we will notice the enhancement of vehicle connectivity through various approaches, a common one being a tamper-proof digital identity, differentiating vehicles from one another within networks.
Vehicle connectivity helps motor companies and consumers to track easily and collect vehicular data for better fleet management, predictive maintenance, big data and analytics, and more.
Every popular motor company, from Porsche to BMW and everything in between, has incorporated vehicle connectivity for better tracking and data collection.
And this approach has no such unattainable challenge, and everything depends on the motor companies whether to implement the connectivity or not. Consumers have to live by the company rules.
Various startup tech companies are focusing their resources on building diverse products that somehow contribute to vehicle connectivity.
A notable mention should go to NoTraffic, an Israeli company developing an AI-powered traffic signal software that connects drivers in the city by digitizing the road infrastructures to manage traffic issues.
Vehicle connectivity enables free-flowing traffic in cities with real-time data synchronization and distribution over the connected network. This trend will (definitely) take over the automotive industry in the future.
9. Automakers and Tech Company Partnerships
A tech-related company can play a major role in introducing innovative ideas to the automotive industry. There are many cases where motor companies have to outsource their task to third-party companies to either fill the void left by an unavailable workforce and infrastructure or accelerate the work process to meet time limitations.
This scene gives rise to an opportunity for motor companies to collaborate with Tech companies to perform wonders with their new creations. Tech companies can utilize their resources to create customized softwires for automobiles as per the requirement of motor companies.
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There are numerous examples where giants in the automotive industry have collaborated with other companies for their benefit.
Some popular ones are General Motors Inc GM.N investing $500 M in Lyft to create an on-demand grid of self-driving motorcars with ride-sharing service. Ford Motor teaming up with Google, Amazon, and AT&T to promulgate its SmartDeviceLink.
The trust issue and friction can be the major challenges between the collaborating companies, which they can maintain through a legal entity. So, we will see more tech companies collaborating with automakers in 2023 and beyond.
10. Increased of Pre-Owned Vehicle Sales
Pre-owned cars can be alternatives to new cars for those with a limited budget to afford a new one. The cars not older than 4 years have almost the latest updates and upgrades, if not the latest. You may be missing out on the latest techs, but you get more than what you (actually) pay (for).
The trend of buying pre-used cars isn’t new in 2023, but the process will elevate more with time. It is because car enthusiasts get new ones and sell their current ones, which cost comparatively less for second-hand buyers.
The challenge in buying a pre-owned car is you may have to spend extra on repairs and software upgrades. But you get what you paid. However, this hasn’t rattled pre-used car buyers, and the metric keeps increasing yearly.
Allied Market Research shows that the global value for used cars was $828.24 billion in 2019, which is projected to jump to $1,355.15 billion by 2027. We will (definitely) witness the increment of pre-owned vehicle sales in 2023 and coming years.
Conclusion: The Future of Automotive Industry…
No matter what, these top 10 automotive industry trends, innovations, and challenges will evolve with time, and some may fade away with it, while others may grow bigger every other year.
These trends come with their respective challenges that are solvable with effort, creativity, and, of course, monetary investments.
The listed trends will impact the automotive industry for years to come, which also introduces many possibilities and opportunities (in the industry) to create bigger and better automobiles in the future.
Overcoming the challenges will lead to better and more affordable motorcars for consumers and, more importantly, the sustainability and longevity of the planet earth’s resources.
🔑 What are the key factors affecting the automotive industry?
There are seven major factors affecting the automotive industry: Political, Customer, Market, Economic, Social, environmental, and Technological Factors.
🔮 What is the future of the automotive industry?
A study by McKinsey & Company has shown that car sales will grow, but the annual growth rate will drop from 3.6% in the last 5 years to 2.0% by 2030. It means there is growth but not as much.
📈 What are the two major trends causing the shake-ups in the automotive industry?
The two major trends causing the shake-up in the automotive industry are the public concern for the environment and technological innovations to edge over competitors.