Top Three Automotive and Mobility Trends in 2025

2025 will be a crucial year for the automotive and mobility industry, with sustainability, digital transformation and shared mobility services shaping business strategies. The year is predicted to be defined by three major trends: the continued softening in demand for EVs in favour of hybrids, the growing shift to more sophisticated autonomous car technologies, and the robustness of the used car market as new vehicle registrations slump. Achieving success will hinge on automotive brands proactively embracing the trends and adjusting their focus away from less commercially potent business strategies.

Softening demand for pure EVs to shift focus towards hybrid technologies

In 2025, new registrations of electric vehicles – BEVs (battery electric vehicles) and PHEVs (plug-in hybrid electric vehicles) – are anticipated to reach a record 18.1 million – up from 16.3 million in 2024. However, growth EV adoption is predicted to slow, with year-on-year growth falling from 15% in 2024 to 11% in 2025. This continues a trend in the EV industry, which has been challenged by the high cost of vehicles and a lack of charging stations. A reduction in government subsidies and perks, and less enthusiasm within the mass market to switch to electric powertrains are also expected to weigh down on sales.

OEMs (original equipment manufacturers) including GM, Hyundai and Ford, have reacted with less optimistic sentiment towards EVs. They have downgraded their EV targets and scaled back production of fully electric vehicles, suggesting that the transition to EVs will take longer than previously expected. Hybrid powertrains are likely to be a more profitable and attractive mid-term strategy, offering consumers a more sustainable and cost-effective choice for mobility than internal combustion engine powered vehicles, while not being reliant on underdeveloped charging networks.

Self-driving to gain traction, but semi-autonomous cars will reign

2025 is predicted to be a big year for self-driving taxi services, as companies look to re-imagine the future of the automotive and taxi-hailing industry. In 2025, Uber and GM Cruise will partner, allowing users of the Uber ride-hailing platform to book fully self-driving vehicles from the app in selected US cities. Furthermore, Appolo Go, Baidu’s self-driving robo-taxi service in Wuhan, which has operated since 2022, is targeting overall profitability in 2025, following successful operations in one of China’s largest cities.

However, sales of robotaxi vehicles will remain a minority, as safety concerns, legislative bottlenecks and the high cost of operations restrict growth. Most vehicles sold in 2025 will adhere to SAE Level 2 autonomy (vehicle autonomy ranges from SAE Level 0 to SAE Level 5, with higher levels implying greater autonomy), where vehicles increasingly incorporate advanced driver assistance features (ADAS), such as lane centring and braking support, into the overall driving experience, though a human driver remains in control.

By 2025, 48% of light vehicles sold across 43 major economies will be SAE level 2

^{Source: Euromonitor International Forecast data}

Meanwhile, SAE Level 3 vehicles, which offer conditional automation, will also grow, though their expansion will be curbed by regulatory barriers, as many countries have yet to roll out the necessary legislative framework for their use on public roads.

Used car sales to continue outperforming the new car market

In 2025, used passenger car registrations are forecast to hit 179 million globally and are predicted to grow by 1.4% year-on-year. Conversely, the new passenger car market is forecast to contract by 0.7% – the first contraction since 2020, when the COVID-19 pandemic hit.

Interest in the used car market is predicted to remain strong among cash-conscious consumers, with cost-of-living priorities remaining high. The cost of new cars remains at an all-time high, and with higher interest rates, consumers are likely either to wait for rates to decrease or to turn to the used car market.

The used car market is also expected to become more important for consumers looking for cheaper EVs, which typically face greater levels of depreciation than internal combustion engine vehicles. However, used electric powertrain vehicles are still few and far between, with the Society of Motor Manufacturers and Traders, in the UK, suggesting EVs make up 2.7% of the total used car market.

With increasing political uncertainty and a cooling economy, responding to the top three trends will be key to traversing a difficult year ahead.

Learn more about the automotive industry in our report, Autonomous and Connected: The Future Global Automotive Landscape.