Automotive industry trends

Current Situation: Rising operational costs in global supply chains are pushing automotive companies to explore digitization as a way to reduce expenses. Technologies such as AI, IoT, and cloud computing allow for more efficient, automated processes, improving supply chain performance.

Expected Business Development: Over the next decade, more companies will adopt digital solutions to cut costs. Digitization will optimize logistics, procurement, and supplier relationships, helping reduce manual errors and lower operational costs while improving responsiveness.

Challenges: The high initial cost of implementing digital technologies, including software and training, may deter some companies, particularly smaller suppliers. Ensuring cybersecurity and data privacy will also be critical as more supply chain processes move online.

Time to Maximum Relevance: 2-4 years

Potential Impact: High

STEEP Segment: Economic

This year’s trend development

Current Situation: The automotive industry is embracing circular economy principles to reduce waste and extend the life cycle of products and materials. This includes remanufacturing, recycling, and designing products for easy disassembly and reuse at the end of their life cycle.

Expected Business Development: Companies will increasingly implement closed-loop systems, where materials are recycled and reused, minimizing the need for new resources. This trend will drive collaboration across the supply chain to ensure that materials can be repurposed efficiently.

Challenges: Adopting circular economy models requires significant changes to product design, manufacturing processes, and logistics. Coordinating with suppliers to ensure alignment with circular principles can also be challenging. Developing new business models, redesigning supply chains, meeting regulatory requirements, and achieving cost efficiency.

Time to Maximum Relevance: 8-10 years

Potential Impact: High

STEEP Segment: Ecological

This year’s trend development

Current Situation: Countries are imposing export restrictions on critical raw materials such as rare earth elements, essential for automotive components like EV batteries and electronics. China, a dominant supplier of rare earth metals, has limited exports in response to global demand, affecting automotive supply chains worldwide.

Expected Business Development: To mitigate the risks posed by export restrictions, automotive companies will explore alternative sourcing strategies, including material substitution, recycling, and collaboration with governments to secure raw material supplies. Investment in new mining projects or recycling technologies may increase.

Challenges: Over-reliance on a few countries for critical materials poses supply risks, and shifting to alternative sources may increase costs and slow production. Export restrictions can lead to volatile pricing and exacerbate supply shortages.

Time to Maximum Relevance: 3-5 years

Potential Impact: High

STEEP Segment: Political

This year’s trend development

Current Situation: Global material shortages, especially for semiconductors and EV batteries, are driving up production costs in the automotive sector. Disruptions caused by trade restrictions, supply chain bottlenecks, and increased demand have strained the availability of key materials.

Expected Business Development: Companies will need to source alternative materials or negotiate long-term contracts to stabilize supply. Investing in recycling and material recovery will also help mitigate some of these cost increases.

Challenges: Material shortages can slow production, increase lead times, and raise costs across the board. Sourcing alternative materials may not always be possible without affecting product quality.

Time to Maximum Relevance: 1-3 years

Potential Impact: High

STEEP Segment: Economic

This year’s trend development

Current Situation: Solid-state batteries are in the research and development phase, with pilot projects and early prototypes emerging from companies like Toyota and QuantumScape.

Expected Business Development: Commercialization is expected in the 6-10 year horizon as manufacturing challenges are addressed, leading to mass production for EVs.

Challenges: Scaling production, reducing costs, addressing material stability, and creating a supply chain for new materials.

Time to Maximum Relevance: 6-8 years

Potential Impact: High

STEEP Segment: Technological

This year’s trend development

Current Situation: Governments and consumers are demanding that companies achieve carbon neutrality in their manufacturing operations, particularly in high-emission industries like automotive. Carbon-neutral goals are being set by major OEMs as part of their broader sustainability strategies.

Expected Business Development: To meet these goals, manufacturers will need to invest in renewable energy, carbon capture technologies, and energy-efficient production processes. Companies that achieve carbon neutrality will gain a competitive advantage in an increasingly eco-conscious market.

Challenges: Achieving carbon neutrality requires significant changes in both technology and process. Some manufacturers may struggle with the cost and feasibility of reducing emissions to zero without offsetting.

Time to Maximum Relevance: 4-6 years

Potential Impact: High

STEEP Segment: Ecological

This year’s trend development

Current Situation: Autonomous driving technology is in the advanced testing phase, with various levels of autonomy (L2 to L4) in commercial and personal vehicles. FaaS models are being explored by companies like Waymo and Cruise.

Expected Business Development: Over the next 6-10 years, full-scale autonomous fleets are expected to be operational, especially in urban areas with advanced infrastructure for autonomous systems.

Challenges: Regulatory hurdles, public acceptance, complex AI algorithms, urban infrastructure adaptation, and liability concerns.

Time to Maximum Relevance: 8-10 years

Potential Impact: High

STEEP Segment: Economic

This year’s trend development

Current Situation: As electric vehicles become more popular, there is increasing demand to power them with renewable energy rather than fossil fuels. Consumers and governments alike are pushing for cleaner energy sources for EV charging to maximize the environmental benefits of electric vehicles.

Expected Business Development: Charging infrastructure powered by renewable energy, such as solar or wind, will become more widespread, with governments incentivizing the development of green charging networks. OEMs may partner with energy companies to offer renewable energy packages to EV owners.

Challenges: The rollout of renewable energy-powered charging stations is slower than the growth in EV adoption, and the cost of developing these networks can be high. Additionally, ensuring a consistent supply of renewable energy in all regions remains a challenge.

Time to Maximum Relevance: 3-6 years

Potential Impact: High

STEEP Segment: Ecological

This year's trend development

Current Situation: V2X technology, which allows vehicles to communicate with each other, road infrastructure, and other devices, is being developed to improve road safety and traffic management. V2X can enable smoother traffic flow, reduce accidents, and provide real-time information to drivers.

Expected Business Development: As cities and road systems adopt smart infrastructure, V2X technology will become more prevalent in modern vehicles. OEMs will incorporate V2X communication capabilities to enhance vehicle safety and support the development of autonomous driving.

Challenges: Widespread V2X adoption requires significant investment in infrastructure, including smart traffic lights, sensors, and connected roads. Ensuring interoperability between different vehicle brands and systems is another challenge.

Time to Maximum Relevance: 3-6 years

Potential Impact: High

STEEP Segment: Technological

This year's trend development