What US Buyers (and Investors) Can Expect from the Auto Industry in 2025

The auto industry is poised for significant changes in 2025, driven by trends such as the shift towards electric vehicles (EVs) and autonomous driving technology. As we look ahead to the coming year, investors and buyers should be aware of the key developments and trends that will shape the industry. Here's what you can expect:

1. Shift towards Electric Vehicles (EVs) and Autonomous Driving Technology:
- The increasing demand for EVs and autonomous vehicles will impact the market share of traditional automakers like General Motors (GM) and Ford. Both companies are investing heavily in EV production and technology to remain competitive. GM plans to launch 30 new global electric vehicles by 2025, while Ford aims to introduce 24 new electric vehicles globally.
- The development of autonomous driving technology is also expected to influence consumer behavior and the competitive landscape in the auto industry. Companies that successfully develop and deploy autonomous vehicles may gain a competitive advantage over those that are not. For instance, GM's Cruise robotaxi business, which was wound down in late 2024, highlights the challenges and uncertainties that companies face in this sector.

2. Increasing Demand for SUVs and Crossovers:
- The demand for SUVs and crossovers is expected to continue to grow in 2025, influencing the US auto industry. Automakers are likely to cater to this trend by introducing new models and updates to existing ones. For example, Toyota is set to release the new 4Runner, a midsize go-anywhere SUV with a hybrid powertrain in 2025.
- This trend is likely to continue, with more automakers focusing on SUVs and crossovers to meet consumer demand. This shift may also impact the supply chain and manufacturing processes of major automakers, as they adapt to produce more of these vehicle types.

3. Impact on the Supply Chain and Manufacturing Processes:
- The shift towards EVs and autonomous vehicles will significantly impact the supply chain and manufacturing processes of major automakers. The demand for batteries, electric motors, and other EV-specific components will increase, while the demand for certain ICE vehicle components will decrease.
- Manufacturing EVs requires different skills and equipment than producing ICE vehicles, which may lead to job losses in areas related to ICE vehicle production. However, the shift will also create new jobs in EV and autonomous vehicle manufacturing, as well as in related fields like battery technology and software development.
- The development of autonomous driving technology will also require new skills and technologies, such as advanced sensors, cameras, and software development. This may cause disruptions and challenges in the supply chain, such as shortages of critical materials, increased competition for resources, and the need for significant capital investment in new technologies and infrastructure.

4. Potential Disruptions and Challenges:
- The shift towards EVs and autonomous vehicles may cause disruptions and challenges in the supply chain, such as shortages of critical materials, increased competition for resources, and the need for significant capital investment in new technologies and infrastructure.
- For instance, Stellantis, which owns brands like Dodge, Ram, Jeep, and Chrysler, is facing inventory buildup and sales slumps, partly due to the delayed EV push and mismanagement of production and demand. This highlights the potential challenges that automakers may face as they transition to EVs and autonomous vehicles.

In conclusion, the auto industry in 2025 is expected to be significantly influenced by the shift towards electric vehicles and autonomous driving technology, as well as the increasing demand for SUVs and crossovers. Investors and buyers should be aware of these trends and their potential impact on the supply chain, manufacturing processes, and competitive landscape. As the industry evolves, it is essential to stay informed and adapt to the changing market dynamics.