The automotive industry in 2024 experienced significant developments, marked by strategic shifts, competitive challenges and evolving consumer preferences. Here are what we think are the top 10 stories of the year, and how they will impact 2025.
Incoming Trump administration seems determined to slow down EV transition and get U.S. out of Paris Accords again
Impact of U.S. Political Changes on EV Policies: First, it was the Biden Admin.’s easing of zero-emission vehicle (ZEV) mandates that allowed automakers more flexibility to meet regulations with hybrid, plug-in hybrids and more efficient internal-combustion engines. That easing up on the accelerator to battery-electric vehicles gave automakers and suppliers some breathing room to earn more profits on ICE vehicles while payback from EV investments takes more years than anticipated. President-elect Donald Trump’s proposed elimination of federal tax credits for electric-vehicle purchases has created huge uncertainty in the industry, especially since Democrats, if they regain power in 2026 and 2028, will likely reinstate them. Despite all this, automakers remain committed to EV strategies, albeit with a slower cadence, having invested heavily in electric mobility that will make them globally more competitive.
2025 Outlook: The auto industry will continue to slow down investments in EVs while charging infrastructure matures, and develop more hybrid vehicles.
Elon Musk has removed all filters and staked his money to reshape the U.S. government
The Rise of Elon Musk: Tesla CEO Elon Musk, depending on the week and share price of Tesla Motors, is the wealthiest person in the world. In 2024, he burst out of his role as CEO of Tesla and SpaceX and got directly involved in the U.S. presidential election, funneling at least $250 million toward getting Donald Trump elected, appearing on stage with the now President-elect and threatening Republican senators who do not support Trump’s Cabinet nominations with primary challenges financed by him.
Musk is a frequent critic of U.S. government regulations and budget deficits and Trump has made the mogul an architect of a new government office charged with shrinking the size of the federal government. This is an unprecedented level of involvement in the U.S. government by a private businessperson, let alone one who is foreign-born. Given the influence of the U.S. government worldwide, Musk is becoming the most powerful person in the world, as well as the wealthiest. Directing regulations that impact the mobility industry may be the smallest influence that the South Africa-born Musk will have.
2025 Outlook: Trying to predict what Elon Musk and Donald Trump will do is difficult. But Musk is being given enormous influence on U.S. government and regulatory policy while being free and willing to spend his fortune on handpicking members of Congress and a successor to Trump in ’28.
In an EV world, the Chinese do not seem to need Western automakers any longer
The Decline of Western Automakers in China: General Motors’ $5 billion write-off in China is just the beginning. The automaker reported a $347 million loss in the first three quarters, prompting strategic adjustments to sustain its Chinese operations and extensive restructuring. GM’s market share in China declined to 6.8% this year, compared with 14% in 2020. Volkswagen’s market share declined from 19.3% in 2020 to less than 14% this year.
Auto analyst Michael Dunne points to the rapid decline of the Detroit Three in China as a story that won’t end well. In 2023, the Detroit Three sold 3.1 million fewer cars in China than they did in 2017: 2.3 million vs 5.4 million. That is six straight years of falling sales, and Dunne says the companies have not hit bottom yet.
Says Dunne: “For decades, they knew nothing but growth and profits. GM, Ford and Jeep – along with their Chinese JV partners – grew convinced of two eternal truths: First, Chinese consumers would forever prefer foreign car brands like Buick, Chevy and Ford over the Chinese offerings. And second, gasoline-powered vehicles would be dominant until kingdom come.” As things turned out, they were wrong on both counts.
2025 Outlook: Mass-market brands of Western car companies have a dim future in China. Luxury brands like BMW, Mercedes-Benz, Cadillac and Audi have a chance of faring better, but for how long? Chinese luxury brands are gaining traction, and younger Chinese car buyers don’t seem as enamored with Western car brands as their parents.
Chinese automakers are going to make life very difficult in Europe for legacy automakers
European Automotive Industry’s Crisis: Europe’s car industry is grappling with stringent emissions regulations, declining demand and increased competition from Chinese manufacturers. These challenges have led to job losses and factory closures among major automakers such as Volkswagen and Stellantis.
European carmakers have experienced a reduction in global market share, with Chinese manufacturers increasing their presence. By 2030, Chinese automakers are projected to double their global market share to 33%, up from 17% in 2023. This shift has intensified competition, particularly in the BEV sector in Europe, South America and domestically in China.
2025 Outlook: Volkswagen, Stellantis and Renault are making difficult, but overdue, moves to cut headcount and capacity. The next year will be painful financially for companies and workers. Will the EU stand in the way of Chinese automakers perhaps buying plants in member states to put more people to work?
Honda Throws Nissan A Lifeline: Honda, on Dec. 23, agreed to join with Nissan under a common holding company–a structure that will take shape formally in 2026. The move was necessary to prop up Nissan. With declining sales and profitability, particularly in the U.S. and China, Nissan’s CEO Makoto Uchida had initiated a comprehensive restructuring plan. The extent of restructuring, unprecedented among Japanese automakers, includes cutting 9,000 jobs, reducing global production capacity by 20% and implementing $2.6 billion in cost savings to revitalize the automaker and secure his leadership position.
But experts in Japan don’t think all that will be enough. Under the new holding company setup, Honda and Nissan should see enormous shared benefits ranging from shared platforms, electric-vehicle investments, capital expenses, commonizing of parts and systems and more. In light of fairly disastrous case studies of two auto companies trying to merge, the new structure worked out by the two companies is designed to put Honda in the management driver’s seat as well as protect the integrity and independence of Honda’s culture and engineering organization.
2025 Outlook: Nissan has long competed more on price than brand. As it restructures in 2025, will it emerge stronger or roughly the same as it was around 2016? Honda is a historically very smart company and has a brand valued worldwide for reliability and durability. Let’s see if Honda’s culture can rub off on Nissan.
BYD is a vertically integrated EV company with considerable backing from the Chinese government.
The Rise of BYD: BYD has experienced remarkable growth in recent years, solidifying its position as a leading player in the global automotive industry. In 2023, the Chinese company sold over 3 million vehicles worldwide, marking a substantial 61.9% increase from the previous year. Notably, in November 2024, BYD reported sales of 506,804 EVs, a 67.9% increase compared to the same month in the previous year.
BYD was created to capitalize on the transition to electrified mobility, starting out as a battery company. The company is therefore vertically integrated and has a firm grip on its supply chain. Additionally, its support from the Chinese government enables BYD to keep costs low. The company has new assembly plants underway in Hungary, Turkey, Indonesia and Mexico while legacy automakers are reducing capacity.
BYD offers affordable yet high-quality electric vehicles, such as the Seagull compact car priced at approximately $10,000 in China. This aggressive pricing strategy enables BYD to undercut many Western competitors, making its vehicles attractive to cost-conscious consumers in China, Europe, South America and eventually perhaps North America. Ford CEO Jim Farley has called BYD and the Seagull a game-changer that every legacy automaker should fear.
2025 Outlook: BYD’s growth in the EU and North America is not an “if,” it’s a “when.” Tariffs won’t be sustainable for very long.
Apple shut down its EV car program. Will it be resurrected in a licensing deal with an automaker?
Apple’s Cancellation of Its Car Project: In February 2024, Apple announced the cancellation of its autonomous-vehicle initiative, redirecting resources to generative AI projects. This decision followed delays and a scaling back of self-driving ambitions, culminating in layoffs and a strategic pivot away from automotive endeavors.
Given the power of the Apple brand worldwide, as well as the company’s prowess and software capability, legacy automakers breathed a sigh of relief.
2025 Outlook: Apple will stay out of the car business but will be working with car companies on software-defined vehicles as a technology partner.
Stellantis is suffering the enterprise costs of rolling up too many brands and people.
Rapid Decline of Stellantis: When Stellantis was formed in 2021 via a rollup of FCA, GM Europe and Peugeot, it was a corporate structure that seemed right out of 1995.
The industry had seen the failure of rollups and broad mergers when, for example, Ford acquired a stable of European luxury brands to try and make up for the decline and stagnation of Lincoln, as well as the disastrous tie-up of Chrysler and Daimler and BMW’s purchase of The Rover Group.
Stellantis made more than $18 billion in 2023, a frothy return. But CEO Carlos Tavares got the raw end of negotiations with the UAW and had not paid close enough attention to the execution of product launches, nor pricing strategy of key brands Ram and Jeep. Additionally, at the direction of Stellantis’s European-centric board of directors, he had been spending enterprise resources on trying to develop audiences for Fiat, Maserati and Alfa Romeo in the U.S. despite all evidence that the Italian brands will never be more than small beer in America.
Financials have deteriorated, the share price is down 50% in a year while the U.S. stock market has been rising, turnover of key executives has been rampant and its relationship with the UAW is in the tank. Stellantis announced in September that Tavares would “retire” at the end of 2025, but disagreements with the board over restructuring strategy led to the CEO’s abrupt resignation in December.
2025 Outlook: Stellantis will have a new CEO. Ram and Jeep will be righted with product cadence and pricing, because those brands are the most financially important in the company. Some brands may be sold or closed. Will an EV start-up want Maserati?
GM has undergone a significant culture transformation under Barra and is arguably in the best shape of any major legacy automaker except perhaps for Toyota.
Recovery of General Motors: General Motors not long ago was seen as a lumbering old-economy auto company. In her 10th year as CEO, Mary Barra has transformed the company after its bankruptcy reorganization in 2009 into arguably one of the most efficient companies in the industry. GM leads all automakers in vehicles sold per employee at 37. For comparison, Volkswagen produces 14, while Toyota produces 28. Its share price is up 35% in 2024.
GM still has plenty of challenges. It’s taking a $5 billion charge in 2024 for restructuring costs in China. General Motors (GM) has decided to discontinue its Cruise robotaxi operations, leading to significant financial implications for both GM and its investors. While GM has not publicly disclosed the exact financial charge it will incur from this decision, it has invested over $10 billion in Cruise since acquiring the company in 2016.
GM is tempering its transition to EVs by rapidly developing more hybrids and plug-in hybrids, and it is growing its hydrogen fuel-cell business. Girding the company’s plans is a robust and profitable ICE business, especially pickups, fullsize and midsize CUVs and SUVs, as well as top-drawer new affordable vehicles like Chevy Trax and Buick Envista, both of which make money.
2025 Outlook: Look for continued improvement and progress from GM. Stay tuned for how its China plans develop.
Cyber criminals always seem to be one or more steps ahead of cyber defenses
Cyberthreats: In 2024, the automotive industry faced a significant escalation in cyberthreats, impacting various sectors and prompting a reevaluation of cybersecurity measures. The 2024 Global Automotive Cybersecurity Report by Upstream Security highlighted a 250% increase in high and massive-scale cyber-incidents compared to 2022. Notably, 95% of these attacks were executed remotely, with 85% being long-range, underscoring the growing sophistication of cyberthreats targeting the automotive sector.
In June 2024, CDK Global, a major software provider for over 15,000 car dealerships in North America, suffered a ransomware attack. The breach disrupted dealership operations across the U.S. and Canada, forcing many to revert to manual processes. CDK Global reportedly paid a $25 million ransom to restore services, highlighting the automotive sector’s vulnerability to cyber-extortion.
Researchers identified security flaws in connected vehicle systems, such as Kia’s web portal, which allowed unauthorized control over vehicle functions. These vulnerabilities exposed millions of vehicles to potential hacking, emphasizing the need for robust cybersecurity protocols in connected-car technologies.
2025 Outlook: Cyberthreats are here to stay. Automakers, suppliers and dealer groups have to keep investing in better, smarter defenses.
