Driving Digital Change: Top Automotive Trends and Innovators 2023

With an overall valuation north of $3.7 trillion, the automotive sector is one of the largest and most powerful in the world. It is also undergoing a period of rapid technological change. From automaking heartlands like Detroit and Shanghai to the disruption machine of Silicon Valley, new hardware and software has emerged that will transform how we buy and sell cars – and how we drive them.

Here are the top automotive technologies, trends, and businesses that are driving digital change for automakers and aftermarket players in 2023.

Advances in driver monitoring systems

One of the most impactful developments in vehicular technology has been the emergence of the driver monitoring system (DMS), a technology that monitors drivers’ behavior and actions. Using a system of cameras and sensors, DMS tools can detect when a driver is becoming fatigued or distracted, and deploy alerts to redirect their attention to the road. The technology helps to prevent accidents and improve overall road safety. Swedish automotive brand Polestar has long been at the forefront of developing DMS technology. The company has pioneered a monitoring system that uses closed-loop cameras to track drivers’ heads, eyes, and eyelid movements. Given the social and economic value of these developments, it seems likely that similar technologies will spread throughout the auto space in 2023 and beyond.

More digital purchasing options

Since buying a new vehicle is a rare and high-stakes decision for most consumers, the automotive industry has been slow to embrace online and digital-first purchasing capabilities. In the post-pandemic era, however, consumer preferences have undeniably shifted in favor of e-commerce, including when it comes to buying cars. In parallel, dealerships are becoming increasingly open to the promise of this new technology for boosting sales and improving customer journeys. Digital purchasing options can make the buying process more convenient and efficient for dealers and customers alike. Customers can research and compare different models[3] from intuitive inventories, configure a car to their specific preferences, and complete the purchase, all from their PC or smartphone. At the same time, dealerships can use automated digital sales platforms to streamline their operations and reduce staffing costs.

One step closer to autonomous vehicles

Few automotive trends capture the world’s imagination like autonomous vehicles, better known as self-driving cars. In 2021, the autonomous vehicles market in the US was valued at $4 billion, a number that’s expected to soar to $186 billion by 2030. At present, self-driving cars are not widely available to consumers, and you’re unlikely to spot one on the road, regardless of your location. However, tech giants like Tesla and Google (through its subsidiary, Waymo) have made significant progress towards the development of autonomous vehicles in recent years. In 2023, technical and regulatory challenges will remain formidable, yet new breakthroughs and rising consumer interest will push the industry closer to securing the holy grail of vehicle technology.

Increased electric vehicle production

The auto industry has already sunk over $1 trillion into the massive, planet-friendly project of replacing combustion engines with software-based electric vehicles. In 2023, we may start seeing some serious returns on this investment. As it stands, the global EV market is in good shape. Electric vehicles now account for 21% of the Chinese automobile market, the world’s largest. In Europe, this figure stands at roughly 12%, while the equivalent market in the US trails behind at 6%[6]. However, in 2023 EVs will be made and sold in greater numbers than ever before. Many large automakers, including upstarts like Tesla and long-established manufacturers such as Mercedes, General Motors, and Ford, announced new electric vehicle lines in 2022. As mass production ramps up, millions of these innovative cars will start appearing on our roads.

Used car sales boom

In the face of a global energy crisis, war in Europe, and stock market volatility, many consumers will favor affordability over novelty and style in 2023. The US is currently experiencing a used-car boom, with demand for pre-owned electric vehicles especially high. Meanwhile, innovative startups like Switch (see our ‘Top Innovators’ section below) are using digital platforms to redefine the buying experience for used cars. Both the used and new car markets have seen turbulence in recent years, with many dealers citing rising acquisition costs and high consumer demand as contributing factors. However, we can expect an increase in availability across both markets in 2023 and 2024, which should provide some relief for consumers.

Top auto innovators to watch in 2023

Embark – Electric trucking solutions

Region served: US

Category: Electric vehicles

Website: embarktrucks.com

Founded in 2016, at a time when the autonomous vehicles industry was focused on passenger vehicles, the team behind Embark broke with the crowd by deciding that the $700 billion professional trucking space was the most compelling home for driverless technology. Since then, the company has built long-haul self-driving trucking software that has the potential to change how goods are delivered globally. The company has raised a total of $317 million[7] in funding and trades on the NASDAQ exchange under the ticker symbol EMBK.

Optalert – Fatigue management for drivers

Region served: Australia

Category: Driver monitoring system

Website: optalert.com

Based in Richmond, Australia, Optalert is a high-tech early-stage startup focused on building sophisticated driver monitoring systems that draw on disciplines like neurology, biotechnology, and vehicle manufacturing. Optalert has developed a powerful algorithm to quantify drowsiness-related cognitive, known as The Johns Drowsiness Scale, which remains the only scientifically proven measurement of drowsiness. The company’s research and technology has immense implications for the future of road safety.

Nikola – Battery-electric vehicle manufacturer

Region served: US, Europe

Category: EV production

Website: nikolamotor.com

Nikola Corporation is a US-based manufacturer of zero-emission vehicles, including all-electric commercial trucks. In 2022, the company began US production of its state-of-the-art electric Tre truck and has made inroads into the European market. Renowned for its beautifully designed fleet, the company is also highly ambitious. With major inventory expansion underway, the company is living up to its resolution to “constantly pursue progression and improvement” The company trades on the NASDAQ under the ticker symbol NKLA.

Shift – Online marketplace for used cars

Region served: US

Category: Vehicle e-commerce

Website: shift.com

Shift is an online marketplace for buying and selling used cars. With “pre-loved” models in high demand, the company has a huge market in which to grow, both in its US base and globally. As well as traditional e-commerce, Shift offers personalized loans and protection plans, all from its digital platform.

Northvolt – EV battery developer

Region served: Europe

Category: Lithium-ion battery manufacturer

Website: northvolt.com

Sweden-based Northvolt is a lithium-ion battery manufacturing company that focuses on providing eco-friendly batteries. The company’s mission is to “deliver batteries with an 80% lower carbon footprint compared to those made using coal energy.” Northvolt has raised almost $8 billion since its 2017 launch. In July 2022, Northvolt raised $1.1 billion to support ambitious factory rollout plans in Europe.

How U+ can help you capitalize on emerging automotive technologies

U+ is a leading global corporate venture-builder that helps companies develop, launch, and scale profitable new businesses, including in the automotive sector. For example, we worked with Bridgestone Corporation, the world’s largest tire manufacturer, to build Firestone Direct, a contact-free digital auto maintenance service. Our international team focuses on everything from product development to commercialization, technology and design. To date, we have brought 100+ successful businesses to market, creating over $2 billion in value for our clients.?