The automotive sector has experienced a wide range of changes in the past year, particularly as a result of the COVID-19 pandemic. As a result, the industry as a whole is undergoing a major transformation away from traditional manufacturing and sales strategies. Instead, 2021 technology trends in the automotive industry are taking a turn toward a more mobile, virtually connected environment.
From corporate decision-making to how automotive employees will continue to work, technology is continuing to drive the automotive sphere into the future.
Read on to learn more about the technology trends in the automotive industry that will continue to catalyze this market around the world.
1. More Mergers and Acquisitions
The start of the pandemic created a stressful environment for automakers and retailers in 2020. While the economic decline has led to a drop in revenue among many top brands, companies have expressed an interest in collaboration to soften the blow.
For brands that have experienced these difficulties, synergizing brands could pose a creative solution that will allow continued growth, innovation, and profitability.
In 2020, automotive deal value and respective volume declined by 32%. This is a sharp change from the 18% rate the industry experienced in 2019. However, that doesn’t mean that synergistic decisions have come to a halt.
Experts expect this volatility to continue into this year, but there are a few core changes in the market itself that could lead to a positive shift in alliances and joint ventures among leading and emerging names in the auto sphere.
Automotive companies across virtually every corner of the market are shifting their resources to promote progressive ingenuity and corporate expansion. This includes everything from webbed acquisitions, to EV adoption, to integration into the world of driverless vehicles.
In fact, 70% of the top deals conducted last year held EV and autonomous technology at the precipice. This growth wasn’t only experienced in North America and Europe, but also Asia and the Middle East as well.
As individual governments prioritize the growth of sustainable and tech-forward driving, we’re sure to see a continued influx of activity within the autonomous and electric vehicle sectors.
2. Electric Vehicle Growth Across North America, Asia, and Europe
Like previously mentioned, renewable energy is a hot-button topic among established and growing automotive companies. As more and more counties boost their requirements for emission reduction, interest in electric vehicles has grown substantially – and is sure to stick around.
Europe has long been seen as the leader in renewable automotive technology, and many countries already have regulations in place to limit the use of gas-powered vehicles on the road. European governments have expressed a strong commitment to lowering CO2 emissions across the continent, which has largely driven success in the EV market.
However, Asia and North America are catching up for a variety of reasons. Across the Asian continent, China continues to make up at least 90% of the market share in this growing sphere. But, that growth is expected to surge throughout the rest of the Asia-Pacific region, at a CAGR of at least 31%, over the next few years.
India, Australia, New Zealand, Japan, South Korea, and ASEAN countries are already building a steady interest in the growth of EV, even though manufacturing capacity is still significantly behind China.
When it comes to supply chain management and polymer development, China is helping to drive and respond to the already heavy demand for EV advancement in the region.
North America’s EV market is a bit more muddled, but there is already a saturated market demand for affordable, accessible electric vehicles – even though the region is known for its dependence on fossil fuels.
Popular brands that are already offering EV models in the 2021 marketplace include:
- American Honda Motor Company
- BMW North America
- Ford Motor Company
- Tesla Motors
- Volkswagen Group of America
- Volvo Group North America
- Jaguar Land Rover Limited
Due to the increasing demand for efficient and easily attainable electric cars and trucks, plus the current American administration’s push for plentiful charging stations, more drivers across the continent are considering adding an electric vehicle to their fleet.
3. EV Platforms and Start-Ups
In response to growing consumer demand for smart and efficient consumer vehicles, these startups show a high level of potential in the 2021 market and beyond:
- Hey Charge
- Fibre Coat
- Surge Analytics
- Eve Autonomy
While COVID-19 has heavily impacted the success of auto sales around the globe, this change has led to the widespread integration of technology throughout the entire production process.
From initial ideation to the showroom, artificial intelligence and immersive media is helping auto brands, developers, and customers to connect like never before. This shift toward tech in the automotive industry has helped retailers and buyers stay active during 2020’s economic downturn, while also shifting the public’s perception of smart capabilities in private transportation.
AI is being used by leading car companies to help consumers find their ideal vehicle, make the driving experience safer, protect their new investment, and more. With just a smartphone and a data connection, consumers can:
- Purchase and finance a vehicle online
- Manipulate customizations via digital renders
- Lock, unlock and track their car
- Check vehicle metrics and specs in real-time
- Safely manage navigation, entertainment, and maintenance information
- Drive more efficiently by utilizing machine learning and AR sensors simultaneously
Additionally, the integration of tech in electric vehicles makes it easier to locate charging points, monitor charge levels, and even control features in the car in a truly hands-free way.
Startups in the automotive industry have taken notice of these trends, and are incorporating consumer trends to create products that meet industry specifications, local regulations, and buyer demand.
4. Self-Driving Cars
Tesla has been the primary autonomous vehicle provider in recent years, but a wide range of retailers and brands are jumping onto this bandwagon. As a result, 2021 is shaping up to be the biggest year for self-driving cars.
Multiple industries, from solar to 5G connectivity, are helping to drive this growth. Autonomous vehicles are no longer a pipe dream for wealthy tech moguls and sci-fi fanatics. In fact, the growth of self-driving cars is creating a zero-based ownership model that could open the roads to more consumers than ever before.
Eliminating the human element from the driving process has the potential to make roads safer and more efficient, largely by eliminating distractions in the same stroke.
Driverless vehicles, or robotaxis, could become the new normal in addition to self-driving consumer cars. Waymo, one of the primary providers in this sphere, took more than 100,000 trips in 2019 alone. Last year, this number climbed to more than 5% of the public market share among robotaxis – or 6.1 million miles on the road.
Since the technology is so new, there is limited data available regarding accident prevention and other safety information. But, self-driving public rideshare services show strong potential for reducing accidents, traffic stoppages, and other hindrances on the road.
Although Waymo was the first company to launch this type of semi-public transit, more and more brands are seeing the demand for simplified, safer autonomous travel.
Those who want to own a piece of this technology have more options, as well. In addition to Tesla, these brands plan to offer some form of self-driving capabilities for mainstream consumers in 2021:
This technology is far from perfect, but it could create a piece of the automotive market that’s ideal for busy commuters, groups, and long-haul travelers all at the same time.
5. Micromobilty Trumps Mass Public Transit
Have you noticed that a variety of bicycles, scooters, and other small-scale transportation methods are popping up in cities around the world? While on your daily commute, lunch break, or shopping run you’ve likely come across a group of branded, cell phone-enabled micro vehicles on most busy street corners.
Micromobility is the next wave of public transportation, and this movement has the potential to supersede standard mass transit in the near future.
Rather than opting for the train or bus, individual travelers can activate a single-occupant vehicle to get from point A to point B.
Common types of micromobility include:
- Standard bikes
- Motorized scooters
- Skateboard lock stations
- Ultra-compact EV units
Whether you’re looking for a daily method of transportation or you want to explore the area on your weekend vacation, micromobility removes a lot of the stress that comes with getting around.
This form of travel eliminates the need for costly parking, expensive vehicle rates and insurances, and even a driver’s license in some cases. Additionally, it’s proven to be the ideal solution for social distancing while maintaining standard travel rates during the COVID-19 pandemic.
Rather than owning the vehicle outright, users instead are able to connect to a publicly housed unit using an app on their smartphone and a connected method of payment. Leading companies are able to take payment information online including credit cards, mobile wallets, and even cryptocurrencies. As a result, users are able to pick up any charged units that are available in public spaces, and they can typically drop off the vehicles wherever they see fit.
Certain options, like microcars and some bicycles, need to be left in designated areas. However, comprehensive mobile apps and account-based connectivity make it easy to find the closest drop off area or the nearest available rental unit with information like:
- Charge level
- Driving proximity
- Drop-off options
- Session duration
Micromobility has also proven to be more efficient than comparable transportation methods, in a few different ways. Compared to the personal use of vehicles, electric scooters and bicycles produce virtually no emissions – and these services don’t rely on the use of fossil fuels. Both individual and shared micromobility options are also more efficient than shared mass transit vehicles, including subways, trains, and busses.
Personal consumers aren’t the only people being marketed to by these growing tech giants. Delivery staff and couriers can use this same technology to continue to work when renting or buying a personal car or truck is not feasible. For private individuals who only want to use a vehicle on an as-needed basis, micromobility solutions are a commitment-free option.
In 2019, one of the top e-scooter companies achieved more than 50 million trips in just two years following their launch in 2017. Now, there are dozens of brands on the market. Between scooter, bike, and similar services, usage among micromobility consumers has risen by more than 9% compared to pre-pandemic levels.
With much of the world committing to a low-emission lifestyle, to be in effect as early as 2030, micromobility could be the best way for mainstream consumers to bridge the gap. Where walking and rollerskating isn’t feasible, electric options like scooters and e-bikes can allow individuals to travel longer distances without the cost, waste, or hassle of traditional methods.
Does this mean that consumers are not interested in purchasing standard vehicles? Absolutely not. But, micromobility is a sound solution for those who are outside of the margins set by auto brands and retailers across the board.
Technology is changing the way we live, and the way we get around. While much of the world is still operating online, it’s just a matter of time before roads and travel pathways are just as bustling as before. To respond to the increased need for interconnected smart devices, accessible travel, and eco-friendly transportation – technology is proving to be the tipping point for consumers across virtually every target demographic.
These technology trends in the automotive industry are setting the tone for consumers across the new, pre-owned, and shared public segments of the market.