Looking into the Crystal Ball – the CASE for Automotive
When compared to other industries, such as consumer electronics, the automotive industry moves relatively slowly. Historically, for the incumbent automotive OEMs, there has been a five-year development cycle for new vehicle introduction and a two-year cycle for limited platform upgrades. Initiatives like Software Defined Vehicles (SDV) are focused on addressing these long development cycles with more efficient use of R&D and reuse of vehicle platforms; however, in general, for the broader market, the SDV has not yet arrived. That said, emerging Chinese automotive OEMs who have been able to design EVs starting from a clean sheet of paper appear to be able to reduce the design cycle from five years to two years.
So looking at the crystal ball to predict the future of automotive, specifically in 2025, I predict we will see to see mostly incremental changes that align with broader industry megatrends, sometimes referred to as CASE - which stands for:
- Connected
- Autonomous
- Shared
- Electric
Unpacking the underlying details of each of the elements of CASE will help to understand the incremental progress that will be made in the 2025 timeframe. Before I discuss each of these specific megatrends and share my thoughts on what incremental announcements we can expect to see, I want to summarize some broader industry trends that I expect we will also see.
OEMs will be even more aggressively spinning back in engineering teams and embarking on their own ASIC designs in an attempt to develop truly unique, differentiated solutions vs. those from merchant semiconductor suppliers. However, the automotive industry still relies heavily on semiconductor and sensor solutions from third-party suppliers. Because of this dependency, the OEMs provide clear signals and direction to those suppliers well in advance to ensure solutions that are aligned with OEM platform requirements and automotive platform development/deployment timelines. With such clear guidance being signaled to the solution suppliers well in advance of the actual need, predicting the future with some level of accuracy can be relatively straightforward.
It is almost a certainty that at the 2025 CES show, now one of the largest automotive shows, there will be many new concepts that will be on display, which in many cases will be an attempt to throw something on the wall to see what sticks. It is also almost a certainty that dependency on AI and the integration of the technology will see exponential growth, where it will be used to provide a more tailored customer and passenger experience in addition to addressing new capabilities like virtual reality which will help further improve automotive safety.
What is also clear is that in 2025, there will be a reconciliation and reassessment of semiconductor players that reconsider/exit the automotive industry as the Gartner Hype Cycle for autonomous vehicles has transitioned from being at the Peak of Inflated Expectations in 2016 to now entering the Trough of Disillusionment in 2025. Typically, there is significant over-investment at The Peak of Inflated Expectations which then gets reigned in once the market enters The Trough of Disillusionment – Intel’s relatively recent spinoff of Mobileye is a good example of what can be expected going forward as the true market size and the lengthy time to revenue for automotive and ADAS especially comes into focus.
Semiconductor startups with a pure-play focus on autonomous vehicles will more than likely get acquired, go out of business, or pivot to focus on other markets. The costs of semiconductor development are significant, and while innovative solutions can yield differentiated results, automotive OEMs tend to be risk-averse and reluctant to embrace new semiconductor suppliers in critical application areas. The very long time to revenue, for ADAS and automotive in general, will eventually cause venture capitalists looking for large returns in a short period to lose their patience and exit the ADAS pure-play semiconductor companies.
Another broader trend is that software competence, along with AI, is becoming a critically important differentiating factor for ADAS, connectivity, and in-vehicle experience. Historically, auto OEMs have been referred to as “metal benders” where most of the other elements of the vehicle were addressed by third parties. As today’s leading vehicle contains 100 million lines of code – going to 1 billion lines of code by the next decade – we can expect that in 2025 and beyond, a great deal of focus is going to be placed on developing software competencies that not only address the operational domains of the vehicle but also support the new mobility ecosystems driven by consumer trends and demands. Software engineering can easily prove to be a bottleneck that will need to be addressed.
Connected
The connected tenant of CASE does a lot of heavy lifting, as many different key attributes of the vehicle are captured in this trend. To pause and give a feel for the importance of connectivity in the automobile, consider how anxious you feel when your internet connection is down, or how useless your tablet would be if it had no support for internet connectivity. Going forward, without connectivity, the vehicle will feel just as useless as the unconnected tablet does today. Some of the fast-growing, underlying trends that will necessitate a network connection include:
- Support for the Digital Consumer/Online Vehicle Purchases
- Personalized Services/Context Awareness
- Feature Upgrades/Everything-as-a-Service
- V2x - vehicle-to-vehicle Communication
- Over-The-Air (OTA) Updates
The analogy of the tablet (or perhaps smart TV) is also very analogous to the automobile in the manner that multiple high-resolution displays will be found throughout the vehicle that will support and provide an immersive digital experience reliant on connected service to deliver personalized content based upon user context awareness. In 2025, I predict you will see more and larger displays in vehicles being announced with many touting 8K resolution.
I also expect more OEMs will announce V2x, which enables vehicle-to-vehicle and vehicle-to-infrastructure communication, greatly enhancing vehicle safety. This increase in vehicles supporting V2x will be driven both by OEMs citing safety-consciousness and also by NCAP (New Car Assessment Program), a collection of similar government regulations instituted across many countries to specify which technologies must be deployed in a vehicle model on an annual basis to receive a high safety rating. In time, just like seat belts, airbags, or rear-looking cameras, these safety features will ultimately become mandatory in new cars.
In 2025, I expect more OEMs to announce, or perhaps more appropriately, preannounce OTA support in conjunction with SDV which will be based on an underlying centralized E/E architecture (see blog). Cybersecurity will also be a big topic that will be discussed and addressed in 2025, including OEM and auto semiconductor supplier announcements to embrace the ISO 21434 cybersecurity standards (see blog). This will be essential as this fully connected platform will have multiple potential attack points that raise a great threat for cybersecurity hacking.
As mentioned earlier – expect to see more AI in the cabin allowing for greater tailoring to both the driver's and passenger's personal preferences. Also, expect greater integration of the vehicle with the consumer lifestyle – including smartwatches and smart homes. In many cases, these will be announcements with demonstration platforms, however mass deployments will most likely happen in the future. Because the consumer’s vehicle purchasing decision is increasingly driven by the capabilities enabled by the connected car and provides an opportunity for OEMs to sell lucrative after-market services/subscription-based services, I expect this space will see a lot of pre-announcements and “concepts” as, in this area, automotive OEMs have dire FOMO (fear of missing out).
Autonomous
The promise of fully self-driving cars for consumers is going to continue to see a lot of heat and light in 2025, however, practical deployments will continue to get pushed out in time for several reasons: technical feasibility, legislation, and end price.
To date, only one major OEM has been certified to be able to support Level 3 ADAS in the US - a far cry from Level 5 full autonomy. Level 3 still requires the driver to be engaged and ready to take over control of the vehicle while the car is in a “semi-autonomous” state. In the case of this one major OEM, there was a significant number of “ADAS disengagements” for given miles traveled – an indication that the ADAS system was overwhelmed, and a driver was required to step in. It’s also important to note that the current legislation in the US limits the roadways where level 3 can be deployed; these roadways are considered to be low risk/suitable for L3 capabilities. ADAS disengagements on low risk roadways are a reflection of the complexity of the AI problem and the fact that a combination of more AI training and more AI performance (TOPs - Tera Operations Per Second) is required to reduce ADAS disengagements.
While robotaxis today offer full autonomy, they operate in a geofenced area (limited roads and very controlled range) and have exorbitant costs driven by extremely high compute performance processors and sensors. Given their business model, robotaxis can eventually amortize those costs much more easily than the consumer-owned vehicle.
I predict announcements of higher-performance AI processors targeting L3 ADAS with integrated in-vehicle-infotainment features. This is in alignment with the move towards the centralized E/E architecture. Auto OEMs will also be announcing more vehicles with L2+ to L3 support – available “soon”. In support of ADAS, many of the key sensor technology manufacturers will be highlighting next-generation technologies that will allow for lower total system cost and higher accuracy. 3D radar will be a hot topic as will solid-state LIDAR. Also, expect to see demonstrations of ADAS cameras with night vision – directly challenging the need for LIDAR. The lower cost, higher accuracy sensors will play a key role in driving the viability of ADAS for the masses.
In-cabin driver monitoring systems (DMS) will also see a significant uptick for reasons similar to V2x - where NCAP is increasingly driving this as a mandatory feature. Legislation is currently being considered in the US, and has passed in the EU, that DMS should be a required feature regardless of ADAS level, to detect drowsy or intoxicated driving. We will see increasing support for occupancy detection systems - additional in-cabin cameras, where again, legislation is being considered to make this capability mandatory to avoid fatalities associated with forgotten children or pets due to heat exposure. These cameras in turn will serve a dual purpose and will also be integrated into the in-vehicle infotainment systems in support of gesture recognition where hand motions can be used to control functions in the car.
Shared
I predict we will see announcements of new entrants in the shared market space (transportation as a service) in addition to partnership announcements between applications providers as Gen X and Gen Z are showing trends toward moving away from vehicle ownership and getting their driver’s licenses at a much later age than previous generations. The cost-conscious generations opt for an Uber rather than taking on the costs associated with vehicle ownership. In general, the concept of having the flexibility to choose the best vehicle for a specific need on-demand via a smartphone is gaining strong popularity.
Furthermore, the aging population will gravitate towards robotaxis to continue to have freedom when they are no longer able to drive. Areas of high population densities will also gravitate toward subscription-based transportation eliminating the need to find parking and pay exorbitant parking fees. As proven demand continues to grow, you can expect to see more entrants in this market either through the introduction of new players or incumbent OEMs finding this market lucrative. To that point, Tesla has continued to signal the intent to enter the robotaxi / shared market for some time.
Also, expect to see announcements and demonstrations from OEMs offering brand consistency across robotaxi fleets – where the passenger’s personal preferences are downloaded into the robotaxi as soon as the vehicle has been hailed ensuring a seamless and consistent experience between any shared vehicle of a similar brand – similar to the continuity across different types of Apple products and platforms.
An interesting trend, which Mobileye has taken the lead in moving towards, is to pivot from being only a semiconductor solutions provider to the automotive OEMs to now getting into the shared transportation business directly – expecting to collect end revenues directly from shared riders. As the automotive semiconductor suppliers build more complex, complete solutions stacks, it is unclear if others will follow that lead, but I could see how it would become enticing. That’s a hard one to call for 2025.
Electric Vehicles
Lastly, I predict we’ll see more announcements and introductions of EVs. This is not only driven by EV mandates but increasing consumer preference. EVs also offer significantly lower barriers to entry in terms of R&D and manufacturing costs as compared to vehicles based on the Internal Combustion Engine (ICE). This has already led to many new market entrants, most notably Tesla, but increasingly from Chinese OEMs, as they see a way to penetrate the high-revenue, high-growth automotive market.
Key technology areas of focus and announcements will include:
- Improved battery technologies
- OEMs’ shift to higher voltage architectures
- Increased availability of and extended capabilities of wide bandgap semiconductors.
These announcements will lead to lower costs, longer battery life, greater energy efficiency, and reduced range anxiety. Suffice it to say, that the EVs will also support the aforementioned Connectivity, Autonomous, and Shared trends and capabilities.
In short, the automobile, and the automotive industry, has already dramatically changed as we know it today. While many different acronyms exist that summarize the automotive industry megatrends, CASE works reasonably well. In 2025, we will see more incremental steps and announcements (and plenty of “pre-announcements”) and demonstrations that are aligned with realizing the vision of CASE.
One prediction I am 100% confident about is that I got some predictions wrong and missed others. Time for a new crystal ball.
When compared to other industries, such as consumer electronics, the automotive industry moves relatively slowly. Historically, for the incumbent automotive OEMs, there has been a five-year development cycle for new vehicle introduction and a two-year cycle for limited platform upgrades. Initiatives like Software Defined Vehicles (SDV) are focused on addressing these long development cycles with more efficient use of R&D and reuse of vehicle platforms; however, in general, for the broader market, the SDV has not yet arrived. That said, emerging Chinese automotive OEMs who have been able to design EVs starting from a clean sheet of paper appear to be able to reduce the design cycle from five years to two years.
So looking at the crystal ball to predict the future of automotive, specifically in 2025, I predict we will see to see mostly incremental changes that align with broader industry megatrends, sometimes referred to as CASE - which stands for:
- Connected
- Autonomous
- Shared
- Electric
Unpacking the underlying details of each of the elements of CASE will help to understand the incremental progress that will be made in the 2025 timeframe. Before I discuss each of these specific megatrends and share my thoughts on what incremental announcements we can expect to see, I want to summarize some broader industry trends that I expect we will also see.
OEMs will be even more aggressively spinning back in engineering teams and embarking on their own ASIC designs in an attempt to develop truly unique, differentiated solutions vs. those from merchant semiconductor suppliers. However, the automotive industry still relies heavily on semiconductor and sensor solutions from third-party suppliers. Because of this dependency, the OEMs provide clear signals and direction to those suppliers well in advance to ensure solutions that are aligned with OEM platform requirements and automotive platform development/deployment timelines. With such clear guidance being signaled to the solution suppliers well in advance of the actual need, predicting the future with some level of accuracy can be relatively straightforward.
It is almost a certainty that at the 2025 CES show, now one of the largest automotive shows, there will be many new concepts that will be on display, which in many cases will be an attempt to throw something on the wall to see what sticks. It is also almost a certainty that dependency on AI and the integration of the technology will see exponential growth, where it will be used to provide a more tailored customer and passenger experience in addition to addressing new capabilities like virtual reality which will help further improve automotive safety.
What is also clear is that in 2025, there will be a reconciliation and reassessment of semiconductor players that reconsider/exit the automotive industry as the Gartner Hype Cycle for autonomous vehicles has transitioned from being at the Peak of Inflated Expectations in 2016 to now entering the Trough of Disillusionment in 2025. Typically, there is significant over-investment at The Peak of Inflated Expectations which then gets reigned in once the market enters The Trough of Disillusionment – Intel’s relatively recent spinoff of Mobileye is a good example of what can be expected going forward as the true market size and the lengthy time to revenue for automotive and ADAS especially comes into focus.
Semiconductor startups with a pure-play focus on autonomous vehicles will more than likely get acquired, go out of business, or pivot to focus on other markets. The costs of semiconductor development are significant, and while innovative solutions can yield differentiated results, automotive OEMs tend to be risk-averse and reluctant to embrace new semiconductor suppliers in critical application areas. The very long time to revenue, for ADAS and automotive in general, will eventually cause venture capitalists looking for large returns in a short period to lose their patience and exit the ADAS pure-play semiconductor companies.
Another broader trend is that software competence, along with AI, is becoming a critically important differentiating factor for ADAS, connectivity, and in-vehicle experience. Historically, auto OEMs have been referred to as “metal benders” where most of the other elements of the vehicle were addressed by third parties. As today’s leading vehicle contains 100 million lines of code – going to 1 billion lines of code by the next decade – we can expect that in 2025 and beyond, a great deal of focus is going to be placed on developing software competencies that not only address the operational domains of the vehicle but also support the new mobility ecosystems driven by consumer trends and demands. Software engineering can easily prove to be a bottleneck that will need to be addressed.
Connected
The connected tenant of CASE does a lot of heavy lifting, as many different key attributes of the vehicle are captured in this trend. To pause and give a feel for the importance of connectivity in the automobile, consider how anxious you feel when your internet connection is down, or how useless your tablet would be if it had no support for internet connectivity. Going forward, without connectivity, the vehicle will feel just as useless as the unconnected tablet does today. Some of the fast-growing, underlying trends that will necessitate a network connection include:
- Support for the Digital Consumer/Online Vehicle Purchases
- Personalized Services/Context Awareness
- Feature Upgrades/Everything-as-a-Service
- V2x - vehicle-to-vehicle Communication
- Over-The-Air (OTA) Updates
The analogy of the tablet (or perhaps smart TV) is also very analogous to the automobile in the manner that multiple high-resolution displays will be found throughout the vehicle that will support and provide an immersive digital experience reliant on connected service to deliver personalized content based upon user context awareness. In 2025, I predict you will see more and larger displays in vehicles being announced with many touting 8K resolution.
I also expect more OEMs will announce V2x, which enables vehicle-to-vehicle and vehicle-to-infrastructure communication, greatly enhancing vehicle safety. This increase in vehicles supporting V2x will be driven both by OEMs citing safety-consciousness and also by NCAP (New Car Assessment Program), a collection of similar government regulations instituted across many countries to specify which technologies must be deployed in a vehicle model on an annual basis to receive a high safety rating. In time, just like seat belts, airbags, or rear-looking cameras, these safety features will ultimately become mandatory in new cars.
In 2025, I expect more OEMs to announce, or perhaps more appropriately, preannounce OTA support in conjunction with SDV which will be based on an underlying centralized E/E architecture (see blog). Cybersecurity will also be a big topic that will be discussed and addressed in 2025, including OEM and auto semiconductor supplier announcements to embrace the ISO 21434 cybersecurity standards (see blog). This will be essential as this fully connected platform will have multiple potential attack points that raise a great threat for cybersecurity hacking.
As mentioned earlier – expect to see more AI in the cabin allowing for greater tailoring to both the driver's and passenger's personal preferences. Also, expect greater integration of the vehicle with the consumer lifestyle – including smartwatches and smart homes. In many cases, these will be announcements with demonstration platforms, however mass deployments will most likely happen in the future. Because the consumer’s vehicle purchasing decision is increasingly driven by the capabilities enabled by the connected car and provides an opportunity for OEMs to sell lucrative after-market services/subscription-based services, I expect this space will see a lot of pre-announcements and “concepts” as, in this area, automotive OEMs have dire FOMO (fear of missing out).
Autonomous
The promise of fully self-driving cars for consumers is going to continue to see a lot of heat and light in 2025, however, practical deployments will continue to get pushed out in time for several reasons: technical feasibility, legislation, and end price.
To date, only one major OEM has been certified to be able to support Level 3 ADAS in the US - a far cry from Level 5 full autonomy. Level 3 still requires the driver to be engaged and ready to take over control of the vehicle while the car is in a “semi-autonomous” state. In the case of this one major OEM, there was a significant number of “ADAS disengagements” for given miles traveled – an indication that the ADAS system was overwhelmed, and a driver was required to step in. It’s also important to note that the current legislation in the US limits the roadways where level 3 can be deployed; these roadways are considered to be low risk/suitable for L3 capabilities. ADAS disengagements on low risk roadways are a reflection of the complexity of the AI problem and the fact that a combination of more AI training and more AI performance (TOPs - Tera Operations Per Second) is required to reduce ADAS disengagements.
While robotaxis today offer full autonomy, they operate in a geofenced area (limited roads and very controlled range) and have exorbitant costs driven by extremely high compute performance processors and sensors. Given their business model, robotaxis can eventually amortize those costs much more easily than the consumer-owned vehicle.
I predict announcements of higher-performance AI processors targeting L3 ADAS with integrated in-vehicle-infotainment features. This is in alignment with the move towards the centralized E/E architecture. Auto OEMs will also be announcing more vehicles with L2+ to L3 support – available “soon”. In support of ADAS, many of the key sensor technology manufacturers will be highlighting next-generation technologies that will allow for lower total system cost and higher accuracy. 3D radar will be a hot topic as will solid-state LIDAR. Also, expect to see demonstrations of ADAS cameras with night vision – directly challenging the need for LIDAR. The lower cost, higher accuracy sensors will play a key role in driving the viability of ADAS for the masses.
In-cabin driver monitoring systems (DMS) will also see a significant uptick for reasons similar to V2x - where NCAP is increasingly driving this as a mandatory feature. Legislation is currently being considered in the US, and has passed in the EU, that DMS should be a required feature regardless of ADAS level, to detect drowsy or intoxicated driving. We will see increasing support for occupancy detection systems - additional in-cabin cameras, where again, legislation is being considered to make this capability mandatory to avoid fatalities associated with forgotten children or pets due to heat exposure. These cameras in turn will serve a dual purpose and will also be integrated into the in-vehicle infotainment systems in support of gesture recognition where hand motions can be used to control functions in the car.
Shared
I predict we will see announcements of new entrants in the shared market space (transportation as a service) in addition to partnership announcements between applications providers as Gen X and Gen Z are showing trends toward moving away from vehicle ownership and getting their driver’s licenses at a much later age than previous generations. The cost-conscious generations opt for an Uber rather than taking on the costs associated with vehicle ownership. In general, the concept of having the flexibility to choose the best vehicle for a specific need on-demand via a smartphone is gaining strong popularity.
Furthermore, the aging population will gravitate towards robotaxis to continue to have freedom when they are no longer able to drive. Areas of high population densities will also gravitate toward subscription-based transportation eliminating the need to find parking and pay exorbitant parking fees. As proven demand continues to grow, you can expect to see more entrants in this market either through the introduction of new players or incumbent OEMs finding this market lucrative. To that point, Tesla has continued to signal the intent to enter the robotaxi / shared market for some time.
Also, expect to see announcements and demonstrations from OEMs offering brand consistency across robotaxi fleets – where the passenger’s personal preferences are downloaded into the robotaxi as soon as the vehicle has been hailed ensuring a seamless and consistent experience between any shared vehicle of a similar brand – similar to the continuity across different types of Apple products and platforms.
An interesting trend, which Mobileye has taken the lead in moving towards, is to pivot from being only a semiconductor solutions provider to the automotive OEMs to now getting into the shared transportation business directly – expecting to collect end revenues directly from shared riders. As the automotive semiconductor suppliers build more complex, complete solutions stacks, it is unclear if others will follow that lead, but I could see how it would become enticing. That’s a hard one to call for 2025.
Electric Vehicles
Lastly, I predict we’ll see more announcements and introductions of EVs. This is not only driven by EV mandates but increasing consumer preference. EVs also offer significantly lower barriers to entry in terms of R&D and manufacturing costs as compared to vehicles based on the Internal Combustion Engine (ICE). This has already led to many new market entrants, most notably Tesla, but increasingly from Chinese OEMs, as they see a way to penetrate the high-revenue, high-growth automotive market.
Key technology areas of focus and announcements will include:
- Improved battery technologies
- OEMs’ shift to higher voltage architectures
- Increased availability of and extended capabilities of wide bandgap semiconductors.
These announcements will lead to lower costs, longer battery life, greater energy efficiency, and reduced range anxiety. Suffice it to say, that the EVs will also support the aforementioned Connectivity, Autonomous, and Shared trends and capabilities.
In short, the automobile, and the automotive industry, has already dramatically changed as we know it today. While many different acronyms exist that summarize the automotive industry megatrends, CASE works reasonably well. In 2025, we will see more incremental steps and announcements (and plenty of “pre-announcements”) and demonstrations that are aligned with realizing the vision of CASE.
One prediction I am 100% confident about is that I got some predictions wrong and missed others. Time for a new crystal ball.
