2024 to 2025

2025 promises to be a turbulent year, particularly with its political and trade uncertainties. However, in automotive terms, the year 2024 was no less dramatic when viewed through the rearview mirror.

Let’s take a quick look.

AUTONOMOUS DRIVING

The robotaxi pilot lost a crucial player in 2024. Following a series of corporate restructurings after the 2023 road accident involving a Cruise test vehicle and a pedestrian, GM's autonomous subsidiary finally threw in the towel. While Waymo marches forward with fresh investments and the backing of its parent company, Alphabet, the demise of Cruise, once again, reconfirms the long tail of the challenging journey toward safe commercial autonomous urban mobility.

At the same time, the glitzy but underwhelming "We Robot" event on October 9 highlighted the coexistence of hype and the hard reality of achieving reliable robotaxi services for the foreseeable future.

What about 2025? Andrej Karpathy, Tesla’s former Director of AI, summarized the situation in 2024, saying, “Tesla has a software problem, and Waymo has a hardware problem.” Neither of these issues shows signs of being resolved affordably or reliably anytime soon.

AI FRENZY

After the major commercial launch of large language model (LLM) platforms in 2023, 2024 became a standout year for AI. Generative AI applications flourished, sparking widespread excitement and pushing AI ethics discussions to the forefront. Here’s few of what happened in 2024.

• Digital art flourished with Gen AI tools like ChatGPT/DALL·E, Midjourney, and Gemini. AI-based search engines supplemented traditional Google searches, and productivity tools ranging from voice assistants to grammar checkers and project management software benefited from AI integration.
• AI single-handedly propelled Nvidia to a valuation exceeding $3 trillion. It’s not an accident that CEO Jensen Huang’s keynote is the most anticipated talk of CES 2025.

Energy Consumption – the dark side of AI: Despite all its promise and success of 2024, the energy demands of AI tools are becoming a growing concern. The servers supporting ChatGPT and similar platforms consume significantly more energy than is often acknowledged. For example, EPRI* estimates suggest ChatGPT uses 2.9 watt-hours per request—about 10 times the energy of a typical Google search (0.3 watt-hours). ChatGPT’s annual energy consumption is projected to reach 226.8 GWh. For your context, this much of energy is enough to:

Google, Amazon, Microsoft, and Meta are now exploring nuclear power solutions to address these insatiable energy demands—including potentially reviving the Three Mile Island nuclear plant.

What about 2025? The year 2025 could mark a pivotal time when AI’s energy needs clash with the national and global sustainability goals.

ELECTRIFCATION

• More is probably written about China and its EV domination in the last six months of 2024 than ever before. The world’s largest auto market, achieved a significant milestone in July 2024 when EVs accounted for 50% of new car sales (including battery EVs and plug-in hybrids). Globally, EV sales grew by 25% year-over-year in 2024, with 15.2 million units sold by November, mostly in China
• In Norway, 90% of new cars sold in 2024 were EVs, supplied by Chinese OEMs like BYD made significant inroads with affordable models. Thanks to the same brands, EV sales in Mexico quintupled compared to the previous year.
• Finally, despite Tesla’s sluggish no-growth year-over-year sales performance, the Model Y and Model 3 remain the best-selling EVs globally.

What about 2025? According to the International Energy Agency, road transport accounts for about one-sixth of global energy emissions. Broad EV adoption could play a pivotal role in addressing climate change. Hence, regardless of headwinds in the US market, expect the overall momentum of electrification to continue globally through 2025.

STATE OF THE LEGACY OEMs

China: 2024 exposed significant cracks in the stability of traditional automakers. Many saw their Chinese market share shrink. GM is writing off $5 billion as part of its joint venture restructuring with SAIC. Volkswagen’s Chinese operations contracted by 12% in the first nine months of 2024. BMW and Mercedes reported sales drops of 33% and 10%, respectively, over the same period.

SDV: After ambitious 2023 projections of $5 billion to $30 billion in software revenues by 2030, many legacy automakers scaled back or remained quiet about their software-defined vehicle (SDV) developments. VW pivoted to partnerships, including integrating XPENG’s E/E architecture and a joint venture with Rivian, aiming for SDV products off these JVs by 2028.

CES AS THE TECH BELLWETHER : 2024 to 2025

PAST

Looking back to the past years, the event often helped set milestones for the mobility industry. Past highlights of my last sixteen years of trips to CES include Ford’s Sync system (the first infotainment ‘system’, departing from a self-contained radio/CD unit), the advent LTE/4G and then 5G, the early phone projection demos – the forerunners of Apple CarPlay and Android Auto, AI voice assistants like Alexa entering vehicles, and the early adoption of domain controllers like Audi’s zFAS. Now defunct, Chinese EV startup Byton showed the concept of pillar-to-pillar display, first at CES 2018, now emulated by many luxury auto brands.

FUTURE : What about 2025?

Rather than making my “list” of ‘what to expect’, let me just share some of what I will probably be looking for while at CES. They are

• What is the current state of SDV eco-system?
• Are automotive Tier1’s doing anything different to adapt to the SDV era?
• Will the attending OEMs give a hint of how the legacy OEMs survive and thrive? How will the Honda-Nissan (and Mitsubishi) JV shape up? Will AFEELA, the product of Sony-Honda mobility, provide any hint?
• Will we hear more about Waymo’s crack at the post-pilot safe and profit generating robotaxi service? Is truck (class 8) autonomy a thing? What is the state of smart sensors?
• Do consumers love getting overwhelmed with more tech or if ‘less is more’ if done right?
• Will the noise of AI thicken or we have more clarity into applications that fundamentally change the way we do things?

Will CES2025 be a fascinating glimpse into the future or just more of the same? ?We will have better clarity in less than two weeks!

Interested in a discussion?

Look forward to hearing from those interested in an independent and experienced analysis and insights. Contact me here via LinkedIn DM or email here (https://lnkd.in/gyT9Yyn7). Look up a sample from last year here (https://bit.ly/43xHR27)