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September 2025
A revenue surge in the next-generation automotive market is on the horizon, with growth expected to reach hundreds of millions by 2034, revolutionizing the transportation landscape. The next-generation automotive market encompasses advanced mobility solutions integrating electrification, connectivity, autonomous driving, and shared mobility. These innovations are reshaping the automotive industry by addressing global challenges such as carbon emissions, road safety, traffic congestion, and digital integration.
The next-generation automotive market is growing due to the stringent emission regulations, government incentives for electric vehicles (EVs), rising consumer demand for intelligent mobility solutions, and rapid advances in battery and sensor technologies. Next-generation automotives represent modern vehicles that use advanced technologies to make the driving experience cleaner, smarter, and safer for the driver. Next-generation automotives contain electric vehicles, hybrid vehicles, connected vehicles, and autonomous systems. These modern vehicles offer a cleaner, safer, and more efficient driving experience, utilizing advanced technologies.
| Metric | Details |
| Market Drivers | • Stringent emission regulations • Government incentives for EVs • Rising consumer demand for smart & clean mobility • Advances in battery, AI, and sensor technology |
| Leading Region | Asia-Pacific |
| Market Segmentation | By Vehicle Type, By Technology, By Component, By End-Use and By Region |
| Top Key Players | Tesla, Toyota, Volkswagen, GM, Ford, Hyundai, Kia, BMW, Mercedes-Benz, Honda, Nissan, BYD, SAIC, Rivian, Lucid, Stellantis, Volvo, NIO, Polestar |
The trends in the next-generation automotive market are partnerships and innovative product launches.
The passenger cars segment dominated and captured almost 55% of the total market share as they are the most widely utilized mode of transportation across the globe. They are the preferred means of transportation for individuals commuting daily due to convenience, safety, and comfort. Thus, automotive manufacturers are prioritizing electric and smart passenger vehicles that appeal to individuals living in urban areas. This type of vehicle is popular across developed and developing regions of the world, with government incentives to promote cleaner vehicles, extending the passenger car to be the most preferred vehicle type in the next-generation automotive market.
The two-wheeler segment is expected to witness the fastest growth rate in the market due to affordability, fuel efficiency, and suitability in congested urban areas. One of the primary modes of transportation for individuals living in areas with high population density, such as India and Southeast Asia, is two-wheeled vehicles. Moreover, electric scooters, e-bikes, and similar products attract consumers who are concerned about climate change and are looking for alternatives to fuel. The ability of two-wheeled vehicles to charge quickly, their ability to utilize easy and accessible parking, and their use in delivery services, all contribute to the growth of the two-wheeled vehicle segment as a vehicle type in the next-generation automotive market.
The electrification segment dominated and captured around 50% of the next-generation automotive market, as the automotive world is focused on reducing pollution and fossil fuel dependency. Electric vehicles (EVs) have gone from a niche market to becoming mainstream, as battery costs decline and charging networks improve. Automotive manufacturers are investing heavily in EVs across their vehicle types to make them readily available to consumers. In addition, the push for electrification is also driven by the rising consumer demand for cleaner, more affordable alternatives to gas-burning vehicles.
The autonomous driving segment is expected to be the fastest-growing segment in the forecasted period due to rapid advancements in artificial intelligence, sensors, and connectivity. Companies such as Tesla, Waymo, and a few more automakers are testing autonomous driving technologies, and the technology is being tested around the globe. Moreover, government agencies are also creating opportunities for more trials of autonomous vehicles with favorable policies. In addition, the demand for autonomous vehicles is increasing at a rapid pace as this type of driving becomes safer along with decreasing cost.
The batteries & fuel cells segment dominated and captured almost 40% of the total market share. Automotive manufacturers around the globe are working to further enhance batteries for longer driving distances and quicker charging times. Additionally, fuel cells, particularly hydrogen fuel cells, are also garnering interest for heavy-duty vehicle applications. The high funding towards battery research and production at volume is increasingly making batteries & fuel cells a dominant segment in the next-generation automotive market.
The sensors segment is expected to be the fastest-growing segment in the market. Sensors are growing rapidly as they are vital to many advanced applications in vehicles, including level 3 and above autonomous driving, driver-assist systems, and connected vehicles. Sensors assist vehicles in analyzing their environment to enhance safety and smarter driving. There is a rising demand for technologies like LiDAR, radar, and cameras, as car manufacturers are increasingly integrating these types of sensors on mid-level cars. Moreover, the push towards smart, self-driving, and energy-efficient cars will make sensors one of the most rapidly growing components.
Personal mobility is the largest segment, as the majority of consumers prefer to own or drive a vehicle for solo transportation. The personal mobility segment dominated and captured around 42% of the total market share. Individuals continue to prefer automobiles, scooters, and electric bikes due to the privacy, comfort, and freedom they give relative to shared transportation options and public transport. The COVID-19 pandemic has deepened the importance of personal mobility due to hygiene.
The commercial & fleet services segment is expected to witness the fastest growth rate in the market since businesses are rapidly moving toward electric fleets and smart fleets to save costs and be sustainable. Ride-hailing, car-sharing, and delivery services depend significantly on next-gen vehicles. Electric fleets are more cost-effective since electricity is typically much cheaper, and companies will voluntarily reduce emissions. Electric fleets are a strong option for companies to pursue if the government supports it through policy and funding incentives. Both commercial services and fleet mobility services are expected to grow faster than personal ownership mobility features in the next-generation automotive industry.
The next-generation automotive market is characterized by significant technological advancements that are occurring in short time frames. Internal combustion engines have or are being replaced by electric drivetrains, and the improvements in solid-state batteries, fast charging, and lightweight materials will increase overall efficiency. Connectivity and AI-enabled systems will facilitate autonomous driving, predictive maintenance, and personalized user experiences in-vehicle. Moreover, the circular economy and green manufacturing processes will optimize supply chain practices to position next-generation vehicles as sustainable and smart forms of mobility. For instance, in April 2024, Marelli launched its ProConnect integrated cockpit and telematics platform at the Beijing Auto Show. The system combined connectivity, infotainment, and driver assistance, boosting intelligent in-car experiences for next-generation vehicles.
Asia-Pacific led and captured almost 52% of the global next-generation automotive market as a result of continuous government support, higher investment in electric vehicles, and fast technology adoption. The region focused on clean energy and smart mobility projects, increasing mobility through new automotive technologies. In addition, the region benefited from lower production costs and urbanization, as well as manufacturing production capacity for vehicles. Developing smart cities, new battery technologies, improving transportation, and the necessary next-generation automotive solutions created opportunities for this region.
China led the Asia-Pacific region, with the largest electric vehicle production and battery manufacturing base. Several factors contributed to the growth of next-generation automotive products and services, including government incentives, strict emissions rules, and significant research and development investment. Moreover, China also invests heavily in smart mobility projects, including electric buses and shared mobility. Overall, China provides a comprehensive supply chain, advanced technologies, and is a world leader in the next-generation automotive product and services market.
Europe is expected to be the fastest growing region in the forecasted period. Stricter emissions laws and the cost of fuel drove up demand for electric and hybrid vehicles to the market. Governments provided tax incentives and other subsidies in order to support the adoption of the new technologies. Nations all across Europe invested in the charging infrastructure, in research and development of new technologies involving connected cars, and for additional research in the electric mobility sector. Many opportunities developed with partnerships between automakers and tech companies, and with continuous curiosity concerning demand for autonomous driving systems. The growth in the European next generation automotive market was attributed to strong policies, significant investment of resources by governments, and the strong customer preference for clean and digital vehicles.
Germany dominated the European next-generation automotive market, developing the next generation automotive market. It is the most overseas famous automaker developing electric mobility and smart vehicle technologies and investing heavily to advance those technologies. Germany exhibited significant competitive advantages with a focus on innovation, research and development, and dealer incentives for sustainable manufacturing limited to scale. Developing strong strategic partnerships between automakers, battery companies, and tech companies also supported and fueled growth in the German market.
The raw material to be outsourced comprise of aluminum, carbon fiber, advanced steel, lithium, nickel, cobalt, and manganese.
The components which are required in the next-generation automobiles comprise of batteries, motors, sensors, semiconductors, and electronic control units.
The raw material and components are combined to form next-generation vehicles such as electric vehicles and autonomous vehicles.
| September 2025 | Announcement |
| Mr. Pham Sanh Chau, CEO of VinFast Asia. | Today marks a historic milestone - the launch of cars that are not just made in India, but made by Indians, for Indians. We are introducing a complete electric mobility ecosystem, thoughtfully designed for Indian families. The VF 6 and VF 7 embody the perfect harmony of practical design, premium quality, and cutting-edge technology that Indian consumers aspire to. Backed by our state-of-the-art Thoothukudi facility and strong ecosystem partnerships, we are committed to supporting India’s vision of becoming a global leader in electric mobility. |
| September 2025 | Announcement |
| Mr. Pham Sanh Chau, CEO of VinFast Asia | Today marks a historic milestone - the launch of cars that are not just made in India, but made by Indians, for Indians. We are introducing a complete electric mobility ecosystem, thoughtfully designed for Indian families. The VF 6 and VF 7 embody the perfect harmony of practical design, premium quality, and cutting-edge technology that Indian consumers aspire to. Backed by our state-of-the-art Thoothukudi facility and strong ecosystem partnerships, we are committed to supporting India’s vision of becoming a global leader in electric mobility. |
| August 2025 | Announcement |
| Robin Li, co-founder, chairman, and CEO of Baidu. | This collaboration represents our commitment to making autonomous mobility accessible worldwide while working with local partners who understand their communities. By integrating Baidu’s cutting-edge autonomous driving technology with Lyft’s platform reach and operational expertise, we’re excited to deliver safer, greener, and more efficient mobility solutions to more users. |
| May 2025 | Announcement |
| Masatomo Hashimoto, Director, Communication Module Division, Communication & Sensor Business Unit, at Murata. | Murata continues to advance RF and wireless module design, delivering high-performance, miniaturized components engineered for optimal integration in next-generation systems. Synaptics shares our commitment to high-quality products and engineering, and we are excited to collaborate on innovative wireless modules for the automotive market, combining Veros SoCs with Murata’s long-standing expertise and track record in compact, reliable module design. |
The next-generation automotive market is highly competitive. Some of the prominent players in the market are Tesla, Inc., Toyota Motor Corporation, Volkswagen AG, General Motors Company, Ford Motor Company, Hyundai Motor Group, BMW AG, Mercedes-Benz Group AG, Honda Motor Co., Ltd., Nissan Motor Corporation, BYD Company Limited, SAIC Motor Corporation Limited, Rivian Automotive, Inc., Lucid Motors, Waymo LLC (Alphabet Inc.), Uber Technologies Inc., Denso Corporation, Bosch Mobility Solutions, NVIDIA Corporation, and Aptiv PLC. These companies are constantly focusing on research and development to create safer, smarter, and cleaner vehicles do dominate the market. In addition, the companies are also heavily investing in advanced electric batteries, charging networks, and autonomous driving systems. Moreover, partnerships with energy providers and technology firms also help the companies scale int he next-generation automotive market.
| Company | About |
| Tesla | Tesla, Inc. is a leader in electric vehicle innovation, with an impressive battery portfolio, Full Self-Driving (FSD) software, and an array of energy solutions. It seeks entry into the sustainable transportation market as well as the emerging AI-powered mobility sector, and continues to establish a vision for an electric, connected, and autonomous future. |
| Toyota Motor Corporation | Toyota Motor Corporation is a key innovator in hybrids and hydrogen fuel-cell vehicles, now moving toward adopting and electrifying in EVs. The company has invested in connected, autonomous, and sustainable mobility solutions to create a transition to electrification, while also exploring a different avenue of clean energy technology. |
| Volkswagen AG | Volkswagen AG is transitioning to an EV-first approach company with its ID series, multiple billion-dollar battery gigafactories in North America, and a global software-defined vehicle (SDV) push and development. Additionally, the company is working toward advanced and autonomous driving, smart connectivity, and shared-mobility platforms to reshape sustainable transportation in a global network. |
| General Motors | General Motors is moving towards an all-electric future with its Chevrolet, Cadillac, and GMC electric vehicle brands. Through Cruise, the company advances an autonomous ride-hailing and robotaxi solution, thus potentially looking at connecting both advanced connectivity and electrification across the automobile ecosystem. |
| Ford Motor Company | Ford Motor Company has a large electric vehicle portfolio with the Ford Mustang Mach-E and the F-150 Lightning, and expands its investments in autonomous driving, connectivity, and next-gen mobility to remain competitive in a global electric, shared, and digital transport market. |
| Hyundai Motor Group | Hyundai Motor Group is already underway in the development of electric vehicles, hydrogen fuel-cell vehicles, and autonomous driving technologies. The company has made investments in robotics, urban air mobility, smart cities, and other ventures as it strives to establish a leading position in future active, sustainable mobility. |
| BMW AG | BMW AG is developing luxury electric vehicles under its “i” series, which combines internal combustion engine technology with digital connectivity. It seeks to invest in sustainability, along with autonomous systems and software-driven experiences, that will transform the premium next-generation automotive mobility. |
| Mercedes-Benz Group AG | Mercedes-Benz Group AG is establishing its EQ brand as a premium electric vehicle line, incorporating AI-powered autonomous driving technologies into its vehicles, while also investing in digital connectivity and sustainable luxury to foster intelligent mobility in its next-generation mobility portfolio, across the globe. |
| Honda Motor Co., Ltd. | Hondo Motors focuses on EVs, hybrids, hydrogen-fuelled cars, autonomous driving, and robotics. The company creates smart mobility ecosystems using clean energy, electrification, and advanced connected technologies. |
| Nissan Motor Corporation | Nissan Motor Corporation produces the affordable LEAF EV and now has an expanded family of Ariya models. The company created new systems to adopt next-generation, mass-market mobility that builds on advanced driver-assist, smart connectivity, and other electrification. |
| BYD Company Limited | BYD Company Limited is a global leader in electric vehicles and batteries, producing cars, buses, and storage systems. The company is focused on affordable e-mobility and sustainability as an area of rapid electrification while aggressively competing in international electric transportation markets. |
| SAIC Motor Corporation Limited | SAIC Motor Corporation Limited is the largest automotive company in China, creating electric vehicles, shared-mobility platforms, and intelligent connectivity solutions to improve adoption. The company creates new smart, autonomous, and sustainable modes of transportation to incorporate into the global economy. |
| Rivian Automotive, Inc. | Rivian Automotive, Inc. develops electric trucks and SUVs with a focus on adventure, incorporating advanced connectivity and electrification. The company Amazon, with electric delivery vans, is catering to lifestyle mobility in the commercial electric vehicle market. |
| Lucid Motors | Lucid Motors manufactures premium, electric vehicles that feature advanced battery technologies and have high-range and efficiency. Lucid competes in the premium electronic and mobility market, by allowing connectivity, sustainability, and autonomous readiness for next-generation transportation experiences. |
| Waymo LLC (Alphabet Inc.) | Waymo LLC (Alphabet Inc.) is an established market leader in autonomous mobility which offers services for robotaxis and licensing programs for self-driving technology; as well as development of AI driven, connected and shared transportation environments to bring enhancements to safety, convenience, and urban mobility to the mobility ecosystem. |
| Uber Technologies Inc. | Uber Technologies Inc. diversifies from ride-hailing into autonomous vehicle partnerships, shared mobility, and providing electric vehicles. Uber’s priority is in a sustainable and connected and driverless mobility services that will help change urban mobility around the world. |
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