5 Automotive Technology Trends to Watch in 2025
Digital transformation in the automotive technology industry is changing, with cars evolving from mere transportation devices to sophisticated, interconnected platforms. Here are five major automotive technology trends to watch for in 2025.
1. Feature upgrades on the go for connected vehicles
Gone are the days when you drove your new car off the lot and didn’t expect any changes until your next vehicle purchase.
Automotive manufacturers are now treating vehicles more like advanced software platforms, capable of adapting on the go. This will give OEMs the ability to push new features, performance updates and security patches long after the vehicle has left the production line.
With 95% of new cars sold globally expected to be connected by 2030, according to McKinsey, expect feature upgrades to become standard for connected vehicles in 2025.
More and more vehicle enhancements and feature upgrades are being made possible by over-the-air (OTA) updates to connected vehicles, giving drivers vehicles that get better over time without having to visit a service center for every fix.
As vehicles increasingly become software-defined, the automotive ecosystem will have to adjust to blurred boundaries between design, manufacturing and after-sales services.
2. AI for predictive maintenance
Artificial intelligence is transforming vehicle maintenance by harnessing connected vehicle data to predict VIN-level health risks and optimize targeted service plans for every vehicle on the road.
Predictive maintenance can be used to improve the customer experiences and grow dealer and digital revenue streams. If performed well, it can also increase customer satisfaction and lower warranty costs. This can improve quality metrics both internally and externally.
OEMs can also harness predictive maintenance to reduce on-the-road failures and deliver customized recommendations to customers – improving CSAT and opening up new digital revenue streams.
With an AI engine for connected vehicle data, OEMs and fleets can generate vehicle-level health forecasts and service plans – and finally deliver on the promise of predictive maintenance.
3. 5G communication for real-time fleet management
5G technology will be more widespread in 2025, enabling ultra-fast, low-latency communication both between connected vehicles and in vehicle-to-infrastructure interactions. This particularly benefits fleet management because it simplifies communication with the fleet.
5G also enables real-time data transmission, which allows fleet managers to benefit from dynamic route optimization, immediate vehicle health monitoring, and enhanced GPS tracking accuracy.
Vehicle-to-everything (V2X) communications will create a more interconnected transportation ecosystem. And those connections between fleet vehicles and infrastructure, traffic signals or other vehicles ultimately improve operational efficiency and safety.
4. More autonomy for more vehicles
In 2025, more autonomous vehicles will be traveling around cities, reducing the need for hands-on driving in certain conditions, and also improving safety and reshaping vehicle ownership.
The Insurance Institute for Highway Safety expects 3.5 million semi-autonomous vehicles on U.S. roads by 2024, with McKinsey projections indicating that 12% of connected vehicles will be equipped with high levels of driving automation by 2030, such as Level 4 (conditional driving automation) and level 5 (high driving automation).
Level 2 automation, which assists with steering, braking, and acceleration, will become increasingly common.
Countries like China are leading the charge, with expectations that one-third of manufactured cars will feature advanced electrical and electronic architectures. While fully autonomous vehicles won't be ubiquitous, foundational technologies like speed limit recognition and advanced driver assistance systems will become standard, paving the way for higher levels of autonomy.
5. Generative AI for driver experience
Generative AI is increasingly making its way into vehicle infotainment systems and the vehicle customer experience, with early adopters releasing first applications and services.
“In order to win shoppers’ attention and increase sales, automakers are producing vehicles that are more like smart devices on wheels with internet connectivity and interactive dashboards,” writes Automotive World. “AI is largely responsible for enabling these digital in-vehicle capabilities that drivers have come to know and love.”
Similarly, Steven Basra, head of global automotive at Google: “Dealerships will embrace AI to enhance customer experiences and streamline operations,” writes Steven Basra.
One of the most well-known functionalities powered by AI is the advanced driver assistance system, or ADAS. Others include lane assistance, adaptive cruise control, and driver monitoring to enhancements such as navigation, parking assistance, and autonomous driving.
All told, AI-enabled systems, from lane assistance and adaptive cruise control to sophisticated navigation and parking assistance, elevating the driving experience.
Dealerships and manufacturers are embracing AI to streamline operations and create more personalized, engaging customer interactions. The integration of chat-based interfaces and generative AI will make vehicles feel more responsive and intuitive.
Learn more about how Viaduct’s AI engine is saving OEMs millions in warranty claims through AI-powered vehicle health analytics.