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Automotive industry trends for 2023 and beyond

2023, the year of transformations

After the rough COVID-19 years, 2022 has seen the start of economic improvements. Although the automotive industry is experiencing its worst sales numbers in over a decade, it saw increased profits thanks to strong demand, allowing for higher prices. Geopolitical issues such as the war in Ukraine and microchip shortages are forcing analysts and OEMs to remain careful regarding their forecasted results. Indeed, as we are all beginning to feel the effect of inflation and uncertain energy supplies, production volumes may be lower than expected. Nevertheless, we are seeing a lot of innovations in the automotive space. Let’s dive a little deeper into the latest automotive industry trends and see how they match with the switch towards software-defined vehicles.

Electric vehicles everywhere?

With the willingness to reduce carbon emissions and the implementation of stricter emissions regulations, OEMs are investing more and more in the development of electric vehicles. In parallel, customers are turning to EVs in order to have cleaner alternatives but also cheaper costs compared to petrol and diesel. Whether this holds true in the future, is still to be determined as electricity costs are rising too. 

What is certain is that EVs are giving rise to a lot of related technologies geared to help companies deliver on the promise of usability, sustainability and costs. Many of these technologies are undergoing research and ripe for investment. For example, battery technologies need improvements. There’s also the charging infrastructure, which is still one of the pain points preventing customers from switching from ICE vehicles to EVs.

Software also plays a significant role in EVs compared to ICE vehicles. Indeed, the charging management, the engine performance, and the range optimisation of EVs relies heavily on software. Another type of vehicle that relies heavily on software is, of course, the elusive self-driving car. 

Will my car ever drive itself?

We’ve been hearing about self-driving cars for years now, but how close are we really from fully autonomous vehicles? Well, we’re still far from seeing them on our streets. Although there’s been huge investments in multiple different technical solutions these past years, and even though we’re seeing trials and tests on public roads, they are far from being globally available for public use.

Autonomous vehicles are expected to generate new business opportunities. With machine learning, advancements in computer vision and new approaches to vehicle sensor fusion, we are seeing a path for more driver assistance features in specific contexts and on specific roads.

As the first level 3 vehicle is now on sale, the industry is crossing fingers for a level 4 in the coming months, although the probability of it happening in 2023 is relatively low. In any case, autonomous driving will require reliable software, complex algorithms and real-time data processing capacities in order to ensure the systems are safe.

The automotive industry is also using digital twins for improving simulations and development of vehicle components and driver assistance systems. 

All things connected?

With the growing number of services that we rely on, the rise of connected vehicles was inevitable. Car companies are exploring solutions to ensure that all of their vehicles are fully connected. 

Whether it’s via Wi-Fi or mobile networks like 4G or 5G, OEMs need to offer a better driving experience, better entertainment and better updates. From traffic information to remote diagnostics, vehicle data upload and use will become more common.

How this data will be used is still a concern that most customers have. The way OEMs will leverage and analyse this data can also lead to better understanding of customers’ driving habits and preferences in order to offer customised services and increase brand loyalty. But it remains a data privacy concern.

From a software perspective, the connectivity protocols, the cloud infrastructure and the transfer of huge amounts of data are challenges that require investments and development improvements.

Hackers’ delight?

Speaking of data, as the number of connected vehicles is rising, so are cyberattack risks. With risks related to safety, OEMs need to ensure that critical systems remain inaccessible to hackers. This requires specific expertise in order to put the right cybersecurity measures in place inside and outside the vehicle. This also implies regular and reliable security updates.

In order to keep the vehicles’ secure, the whole chain needs to be secure. This not only implies that the vehicle backend, the infrastructure and the mobile network are secure, but also the data transactions and the embedded software and hardware.

Cybersecurity and functional safety are two different domains and expertises, but one cannot ensure the safety of vehicle occupants if the vehicle itself is not secure.

Conclusion: what you prioritise now will set the stage for innovations in the future

Companies need to understand the latest automotive industry trends in order to adapt and remain competitive. Investing in the right ones will secure success in the coming years.

What’s specific to the automotive industry is that not only are the technologies and innovations rapidly advancing, customer expectations and experience are also shifting very quickly. These changes also have a big impact on the way software is being used.

If you want to know more about the major trends in automotive, read our dedicated whitepaper and stay up-to-date on the expertise you need to stay ahead of the competition.

To learn more about Canonical and our engagement in automotive: 

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