One of the biggest is the move to new-energy vehicles. If you go back five or six years, people thought the electric vehicle future would happen by 2030—the industry got that wrong. Now, the smart automotive manufacturers know that, for the transition to work, it has to be consumer-led, not regulatory- and technocrat-driven.

Our industry is responsible for 15% of world greenhouse gas emissions. This move to new-energy vehicles is massively important, but you can’t just regulate for it, it has to work for consumers. This is something I think a lot of the industry—and certainly governments and regulators around the world—have completely missed.

The pace of change is different in every market and therefore the bit that manufacturers have learned is that you have to have a multiple drivetrain approach. That is, a strategy where you develop vehicles which can support several different propulsion systems. You’ve got to have EVs, of course, but, most of all, you need a hybrid approach. You’ll need to be in all forms of new-energy vehicles, including hydrogen, but that can be really expensive.

The second factor driving industry transformation is the rise of Chinese brands. These brands have been around for a long, long time, but if you look at the last five years, they’ve really moved out of the world’s biggest automotive market—more than 30 million vehicles are sold per annum in China—and they’re entering all markets around the world, save the United States, and creating more competition.

Another thing that’s changing in our industry is how consumers buy vehicles. Everyone starts their journey online now. Today, the default for consumers around the world is Google. But if you use ChatGPT or Perplexity, and that’s your home for finding out about the world, automakers have to really master that technology to meet consumers where they are. We need to understand what generative AI means for the sale of vehicles and how you interact with consumers and that’s going to change very rapidly.

And if that isn’t enough, global supply chains are also under pressure. On top of what’s going on in the Middle East at the minute, global supply chains are under pressure where there are rare earth minerals. Cars are now full of technology, and it’s not just in the way the car drives, but also the infotainment system and how passengers are served with technology, microchips are in everything from door mirrors to lighting systems.

Because of this, we’ve seen a lot of disputes around rare earths in the last 12 months. In the latter half of last year, there was a big geopolitical battle around a company called Nexperia and what happened to all their chips. Now the industry is thinking about the possibility of another supply chain issue, like the semiconductor issue we had in 2021.

The industry is under pressure. But we find it super exciting to be involved in this shift. The way a lot of manufacturers think about this is that competition is good for the industry—and it will end up being really good for consumers—but at the moment, it’s putting increasing pressure on brands.

There is a massive amount of change which is causing more complexity, more competition and more cost. It’s not getting any easier in 2026, but there are certainly opportunities for growth and one lies in industry partnerships, designed to tackle cost bases and drive faster innovation.

Toyota partnering with BMW for hydrogen powertrains is an example of that, given all the investment that Toyota has made in hydrogen. Ford and Renault announcing a partnership for small vehicles in Europe is another example. Hino Motors, the Japanese commercial vehicles company, is merging with a Daimler company called Mitsubishi Fuso Truck and Bus Corporation in Japan, so they can share R&D and development costs, because they face the same thing that passenger vehicle manufacturers do around multiple drivetrains.

Partnerships inside the industry will be really important to address the cost issue, the speed of innovation opportunity for them, and the development of new technology.

The automotive industry may be under increasing pressure, but mobility is crucial to the world’s economies, to have successful businesses, successful families, and successful individuals. In the end, the winners won’t be those who follow the loudest mandates, but those who build what people actually want to buy.

As told to Francesca Cassidy

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