Automotive trends 2023
With 2023 now a month old, it feels like a good time to look ahead at the developments and trends that might define the year
Battery electric vehicles continue to rise in popularity
The move towards alternative fuels is already well underway. Amid concerns about climate change and air pollution, governments, businesses and consumers are increasingly looking for better options. Electric and hybrid vehicles emit significantly fewer greenhouse gases and other pollutants than traditional internal combustion engine (ICE) vehicles, making them a more environmentally friendly option. In addition, advances in battery technology are making electric vehicles more practical and affordable for a wider range of consumers.
Our latest research (the 2022 Car Cost Index) shows that the total cost of usership of battery electric vehicles (BEVs) is now comparable to ICE vehicles, while our EV Readiness Index demonstrated that tax incentives and infrastructure are well established in many markets, making electric vehicles more accessible than ever. Taken together, these factors point to pure electric vehicles making even more advancements in 2023.
The impact of EURO 7 on plug-in hybrids
The EURO 7 emission standards are set to be introduced across Europe in 2025. We think these erode the business case for plug-in hybrid electric vehicles, so with fleets already preparing for the new regulations, we expect there to be caution around large orders of plug-in hybrids in 2023.
More electric vehicles to choose from
A record number of new battery electric vehicles (BEV) models hit the market in 2022 – and the range is set to widen even further in 2023. The vehicles we’re most excited about include:
- Picture1 - Audi A6 E-Tron
- Picture2 - VW ID 7
- Picture3 - Vauxhall (Opel) Astra electric
- Picture4 - Smart 1
- Picture5 - Hyundai Ioniq 6
Audi A6 E-Tron
VW ID 7
Opel Astra electric
Hyundai Ioniq 6
Lead times levelling out
The automotive industry has seen several significant disruptions in recent years from Covid to conflict to the consequences of Brexit, not to mention changes in consumer demand and challenges with supply chains.
These had a negative effect on delivery (lead) times, as manufacturers adjusted their production schedules or had to find alternative suppliers for source materials. Even now, lead times remain much longer than they used to be – but there are signs of improvement.
Businesses have learnt to adapt to disruptions caused by the COVID-19 pandemic, the semi-conductor crisis seems to have reached its peak and the production of new cars and vans is returning. However, it's important to note that lead times can vary widely and are likely to be influenced by a range of factors, including demand, production capacity, location and supply chain disruptions.
Though the first signals are looking positive, it's difficult to know exactly how significantly lead times for vehicles in Europe will change in 2023.
Artificial Intelligence (AI) in vehicles
The world of journalism has been rocked in recent weeks with the launch of ChatGPT, artists and creators have been challenged by the rise of Art AI, such as Dall-E, and it looks like automotive is next. While fully autonomous vehicles (level 5) are not yet available for widespread use, many companies are working on developing the technology.
In 2022, Mercedes-Benz was the first car manufacturer to get approval in Germany for (limited) level 3 autonomous driving. Their two flagship models, the S-Class and the electric EQS, are now available with conditional self-driving tech. The system used by Mercedes (called “Drive Pilot”) allows the driver to give complete control to the vehicle on suitable motorways in Germany with speeds of up to 60 km/h. Even though level 3 is currently reserved for a limited number of exclusive car models and a limited number of situations, the next step has been taken towards autonomous driving.
It's likely that we'll see more self-driving features introduced in 2023, particularly in limited or controlled environments, such as ride-sharing fleets or designated "smart cities." However, it's important to note that the development and deployment of fully autonomous vehicles will likely be a slow process, as there are still significant technical and regulatory challenges to overcome.
The rise of smart cars
What is more likely is that Connected and "smart" cars will become more prevalent in the coming years. These vehicles are equipped with sensors and other technologies that allow them to communicate with each other and with infrastructure, such as traffic lights and road signs. This can improve safety, efficiency, and convenience for drivers. In addition, the increasing use of internet-connected devices in cars is likely to drive the development of new in-vehicle services and experiences, such as personalized entertainment and information, as well as enhanced navigation and traffic management.
Shared mobility services
The automotive industry is likely to continue to see the growth of shared mobility services, such as ride-sharing and car-sharing. These services allow people to access transportation on an as-needed basis, rather than owning a vehicle outright. This can be a more convenient and cost-effective option for many people, particularly in urban areas where public transportation is readily available and parking is scarce. The growth of shared mobility services is likely to have a significant impact on the way people use and think about transportation in 2023.
Whatever comes next, we’re here to help
The industry is likely to see some significant changes in 2023 – and even more in the years that follow. Whatever happens, though, you can be certain that we will be here to keep you informed, support you with the challenges you face and help you make the most of the opportunities that are available.
For our latest thinking and ideas, why not listen to our regular podcast. It’s updated every month and the latest one focuses on looking back to 2022 and what’s next for fleets in 2023.