Trends in the automotive industry in 2024
The automotive industry is reinventing the car. The major automotive trends of electrification, digitalization, urbanization, sustainability, and individualization are mostly accelerating, while top concerns of the market were the global economy, inflation, the Ukraine war, chip shortages, overall supply chain challenges and the shift to remote/hybrid workforces.
1. Still most dominant trend: Electric vehicles
Probably the most important trend in the automotive industry is the worldwide shift to electric vehicles (EVs). Expectations are that by the end of the 2030s, over 30 % of the cars on the road will be EVs. Regulatory requirements will be a large factor in this growth. Many countries have set out to achieve net-zero emissions by 2050. The range of EVs is increasing. Finally, Lithium-ion battery prices have fallen substantially over the last decade. One of the key technologies for the success of electric cars is lightweight construction. Every gram of weight is fought for to achieve a greater range.
However, a trend of falling demand for electric cars could intensify in 2024. There are increasing signs around the world that the market for electric vehicles (EVs) could take a serious hit in 2024. There are increasing signs of a downturn in the industry in both China and the USA. The reasons are less to do with the cars and manufacturers themselves, but with the increasingly difficult framework conditions. In March 2023, the European Union agreed on binding targets for the expansion of the charging infrastructure. In the US, sales of electric cars weakening — US sales had only just picked up speed when a political dispute broke out over the electric car.
2. The driving mobile phone: Connected vehicle
As 5G and the Internet of Things (IoT) continue their growth, vehicles are becoming more connected. Automatic maintenance information, location-based tips, dynamic traffic jam forecasts and infotainment services such as music streaming. Connected vehicles can communicate with other systems and collect data from its surroundings. The growth in connected vehicles will be driven by the further adoption of 5G technologies. Some of the largest tech companies are also now observing this market. Google and Ford recently announced a connected car partnership. Such connectivity should allow drivers to remain connected at all times. In addition, the initiative will leverage the data collected by adding Google’s AI capabilities to Ford vehicles. Furthermore, certain companies are bringing banking to the automotive industry. The product will allow vehicles to automatically pay for various car-related expenses such as repairs or fuel.
3. More to come: Automated and autonomous vehicles
Autonomous vehicles (AVs) are set to disrupt the auto industry. It’s estimated that there will be 33 million AVs on the road by 2040. The market for AVs is currently valued at around $207 billion. It is expected to grow by roughly ten times the amount within the next four to six years. Some of the largest automakers are already involved in manufacturing AVs. Consumer and regulatory concerns are still one of the major hindrances in an even steeper growth. The control software will become one of the most important quality features of cars in the future.
In 2024, we can expect some far-reaching technical and legal adjustments for car manufacturers in the field of autonomous driving: starting with the mandatory EU-wide regulations regarding vehicle assistance systems, through US approvals for marker lights, to current technical advances of major car manufacturers. The focus currently lies on Level 2++ with a shy but confident view to Level 3. The industry has recognized that the hurdles for Level 4 cars are high in many areas. On the hardware side, a redundant and, above all, reliable sensor set is key.
4. Key driver: Software development
Progress in software technology is key when it comes to finally introducing fully autonomous vehicles to the streets. For electric vehicles it is essential, that the software is compliant with key functional safety and security standards. The leading concerns in automotive software and technology development are safety, security, quality, testing and team productivity. Overall safety remains the top concern. Regarding security concerns most brought issues of cyber-security regarding unauthorized access to on-board and off-board systems. Areas of automotive software development range from design & development, chassis and safety (EPS, brakes, airbags), software, ADAS and software for the supply chain. Ensuring that software is compliant with key industry coding standards and guidelines is an essential part of the automotive development process for all types of vehicles.
5. Changed user behaviour: Urban mobility
In metropolitan areas, more and more people will consciously choose not to own a car in future and instead combine different forms of mobility in a smart way. The importance of the car as a status symbol is declining, while the demand for innovative services such as car sharing is increasing. Cars have long been the favourite mode of transportation. Survey data shows that the number of people commuting by car decreases as individuals become more aware of the environmental repercussions of their vehicles and more annoyed by traffic congestion. Some analysts believe “micromobility” will become more popular. Micromobility involves using small, low-speed transportation alternatives like bikes, scooters and mopeds, as well as the electric versions of these vehicles. These transportation options are a viable alternative for individuals traveling over short distances. As a result, sales of e-bikes and e-scooters rose and the whole market is expected to grow to $195 billion by 2030. Shared micromobility vehicles are becoming a popular mode of transportation in highly polluted cities. More than 200 cities in the United States have shared micromobility options.
6. Market shift: Online vehicle purchases
The internet is affecting every part of the car-buying process. Over 90 % of car purchasers do online research before making a purchase. More and more sales are taking place solely online. Pre-pandemic, only about 4 % of total car sales took place online. Online vehicle retail services offer a major increase in buying efficiency and are a threat to the traditional car dealer-focused business model. In traditional dealership settings, customers spend over 3 hours on average in the dealer’s showroom. With online transactions, customers can complete the purchase with the click of a mouse. Some car manufacturers sell its cars exclusively online, completely abandoning the traditional car-dealership model. Most manufacturers will offer a variety of sales models, with a tendency to a string direct marketing and less contractual dealership.
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