5 Emerging Trends in Automotive Electronics for 2025
Ottawa, Friday, 4 April 2025.
TechInsights highlights 5 key trends reshaping automotive electronics, focusing on AI, electric vehicles, and the evolving semiconductor market, crucial for the future of the European automotive industry.
Electric Vehicle Revolution and Power Electronics
The automotive electronics landscape is witnessing a dramatic shift, with battery electric vehicle (BEV) demand projected to surge by 60% in dollar value by 2025. This growth is primarily driven by innovations in silicon carbide (SiC) and gallium nitride (GaN) power devices [1]. The transformation is particularly significant in the European market, where stringent emissions regulations are accelerating the adoption of advanced power electronics systems.
Advanced Vehicle Architecture and Regional Leadership
China has emerged as the frontrunner in implementing sophisticated electrical/electronic (E/E) architectures, with projections indicating that one-third of vehicles manufactured in China will incorporate advanced domain controllers and high-performance compute units by 2025 [1]. This transition to software-defined vehicles represents a paradigm shift in automotive electronics, forcing European manufacturers to accelerate their technological advancement to maintain competitiveness [2].
Automation and Processing Power
A significant milestone approaches as Level 2 vehicle automation integration moves into mainstream models by 2025 [1]. This development is driving unprecedented demand for advanced processors and memory devices [2]. The expansion of automated driving capabilities is creating new challenges in semiconductor supply chains, with manufacturers facing complex inventory management situations despite increasing chip content per vehicle [3].
Connectivity and AI Integration
The automotive sector is witnessing a decisive shift toward 5G technology, with 5G chipsets expected to supersede 4G in automotive applications [1]. This transition is being fueled by growing consumer demand for enhanced connectivity and sophisticated infotainment systems. The integration of artificial intelligence is simultaneously reshaping processor requirements, leading to increased demand for specialized semiconductor components [2].
Market Outlook and Supply Chain Dynamics
The automotive semiconductor landscape faces potential undersupply risks for certain device types by 2025 [1]. This situation is complicated by ongoing inventory adjustments and expired purchase agreements, creating a complex market dynamic that requires careful navigation by industry stakeholders [2]. The sector continues to evolve rapidly, with major leadership changes among automakers in 2024 signaling a period of significant transformation [3].