Navigating The Next-Gen Automotive World

From AI safety and cybersecurity to energy storage and connected experiences, every layer of the EV value chain is transforming. At EFY Expo Pune 2025, Dr Ajay Palkar of SKODA Auto India outlined seven pillars driving next-gen mobility and why India must leap from assembly to full-scale innovation and global leadership.

The automotive industry is no longer just about wheels, engines, or fuel; it is about intelligence, sustainability, and transformation at every level, and it is racing ahead. We are entering a decisive decade, where the convergence of electric mobility, AI-powered safety systems, cybersecurity, smart manufacturing, and digital-first customer experiences will completely redefine how we build, use, and interact with vehicles. India, with its massive market, engineering talent, and rising startup ecosystem, stands at a pivotal juncture. But to move from being a mere assembler to a global innovator, we need more than policy and ambition, deep-rooted capability across the entire value chain. Starting from now, perhaps by 2030 or 2035, there might be some explosive growth across several verticals.

Seven critical pillars

From the analysis, seven key areas will define the future of mobility and challenges are guaranteed, but so are immense opportunities. Let us drive through them one by one.

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1. Embracing sustainable mobility

We are firmly steering away from traditional internal combustion engines to electric vehicles (EVs), hybrids, flex-fuel systems, and even hydrogen-powered drives. Full EVs will take centre stage. And India? It is just warming up. Compared to auto giants like China or Japan, our market share is still small; but the year-on-year EV growth of 53% speaks volumes. Government policies, subsidies, and a rise in strong EV players are accelerating adoption. By 2035, EVs might account for 25–35% of the Indian vehicle market.

2. Adopting AI and autonomy

Enter advanced driver assistance systems (ADAS). Why are they crucial? Because 70% of road accidents stem from driver error, and another 40% come from chaotic traffic conditions. ADAS offers solutions ranging from simple driver alerts (beeps and visuals) to fully autonomous intervention. With a compound annual growth rate (CAGR) of 18.8% expected by 2032, this space is booming. That said, infrastructure and awareness need to catch up. Regulatory standards are still evolving.

3. Ensuring cybersecurity

As vehicles become smarter, they also become more vulnerable. Software is no longer a back-end support system; it is the control centre. From in-vehicle functions to original equipment manufacturer (OEM) back-end systems, cloud connectivity, third-party integrations, and predictive maintenance, software is the spine. With all this connectivity, cybersecurity becomes non-negotiable. The market is projected to grow from $238 billion in 2020 to $469 billion in 2030. That is not growth but a tech revolution.

4. Focusing on battery and energy

Yes, EVs dominate this narrative, but the scope of battery and energy storage goes far beyond them. From two-wheelers and passenger cars to grid storage, telecom, and renewable energy sectors, battery technology is becoming ubiquitous. The challenge is in developing batteries that are lighter, more energy-dense, and, crucially, recyclable.

5. Investing in smart manufacturing

Smart manufacturing is about intelligent automation. Using fewer people, achieving higher output, reducing errors, and lowering costs. Whether through Industry 4.0 frameworks, digital twins, or predictive maintenance via the Internet of Things (IoT), this shift is redefining how vehicles are built.

6. Prioritising customer experience

Today’s customers are not only smart; they are demanding as well. Electrification, autonomous driving, customisation, diverse mobility, real-time connectivity, seamless interfaces, and that ‘wow’ factor are no longer optional. If you want loyalty, you have to design for experience, not just utility.

7. Preparing for mobility as a service (MaaS)

This is about redefining how we access vehicles, not just how we own them. With urban populations exploding and traffic worsening, shared mobility, subscription-based models, and integrated mass transit are evolving fast. It is all about the convenience.

Where Are We Today?

So, where are we on this roadmap? From design and engineering to testing and scale, we are on the brink. The pieces are coming together, but there is work to be done. The automotive world is shifting fast. And for those willing to innovate, collaborate, and adapt, the road ahead is full of possibilities.

Let us start with the big picture. Power generation and distribution, whether commercial, industrial, or residential, is seeing a tectonic shift. But here is the crucial point: software is becoming the real driver behind it all. Look at the data.

In 2023, the demand for energy storage was about 4 GWh. By 2035, it is projected to reach 139 GWh. That is not a curve; it is a launch trajectory. With a 14 per cent CAGR, this is not just growth—it is transformation. Smart manufacturing is riding the same wave. Factory automation, powered by artificial intelligence (AI), robotics, and now 5G, is booming. In 2021, this market was worth US$42 billion. By 2031, it is expected to touch USD$558 billion, at a CAGR of 8.7 per cent.

And what is at the centre of all this progress? The customer. But today’s customer is not what they were 20 years ago. Back then, people walked into dealerships asking, “What is the horsepower?” Today they are asking, “What is the advanced driver assistance level?” 

Some even ask if Level 10 exists. In short, we have moved from engine power to digital power. Cars are now judged on the number of applications they support, the intelligence of their infotainment, and the depth of their connected features. MG Motors initially discussed ‘Internet Inside,’ but now everyone is in on the game. Data is the new fuel.

And with EVs, this becomes even more critical. EVs need to be cloud-connected, not just for charging and payments but for locating service centres, planning trips, or even just finding the nearest charging station in the middle of nowhere. The EV user expects the same seamless experience they get from their smartphones—and they are not wrong.

This brings us to the next big shift: MaaS. We are transitioning from vehicle ownership to vehicle access. Shared mobility is no longer niche; it is the new normal. The CAGR for micro-mobility adoption is 32.39 per cent. By 2030, the market could reach US$4.7 billion. Nearly 46 per cent of surveyed users are open to replacing their private vehicles, and 70 per cent are willing to use continuous shared shuttles.

Consider Mumbai, where Brihanmumbai Electric Supply and Transport (BEST) buses are the lifeline of the city. Today, it is the metro that is taking over. That is the power of a well-designed, smart transport system. The future is not just about getting from point A to B—it is about doing it smarter, cleaner, and more efficiently.

To sum up, as we gear up for this mobility revolution, the challenges are real, but so are the opportunities. Whether you are in product development, original equipment manufacturer (OEM) services, or part of the technology supply chain, you are in the driver’s seat of this transformation. Let us not just ride the wave; let us lead it.

Strategy drives EV transition

One of the most challenging areas in the automotive sector is not just technology—it is business strategy and planning. Especially when it comes to balancing market demand for conventional internal combustion engine (ICE) vehicles and the push towards EVs.

We are standing at a crossroads. Original equipment suppliers (OES) are grappling with an identity crisis: do we invest in conventional powertrains, hybrids, or go fully into EVs? Some OEMs such as Toyota and Suzuki, are taking a more cautious route, favouring hybrids as a transitional technology. They are not in a hurry to commit deeply to EVs. 

But then there are Tata and Mahindra, charging ahead, both in ICE and EV segments, but with a clear focus on electric. Tata’s EVs are already chart-toppers, and Mahindra’s BE.06 and BE.09 feel like fighter jet cockpits: jazzy displays, immersive systems, early Tesla vibes, but with an Indian twist.

This brings us to a key pillar of strategy: technology adoption. It is not just about being flashy; it is about being strategic, how to reduce research and development (R&D) cost, create scalable platforms, and build a competitive edge. Hardware-software architecture is one of the biggest hurdles today. OEMs want to sell the same base model in both India and global markets. But the catch? Consumer expectations vary vastly across regions. The goal then becomes clear: create one flexible, modular architecture that can cater to high and low variants across multiple geographies, without inflating costs.

Then there is the elephant in the garage: skills and capacity. We do not just need fresh graduates; we need mid-career professionals who grew up with ICE systems to reskill and unlearn. EVs are a new ball game. Power electronics, battery management systems (BMS), and software-defined vehicles—this is not business as usual.

Validation and testing are another make-or-break area. You can design a spectacular EV, but if you do not rigorously validate it to automotive-grade standards (just below defence-grade), you will never gain the market’s trust. Reliability is king, and testing protocols must be non-negotiable.

We also need to move away from siloed development. Co-development is the way forward—technology partners and suppliers are no longer vendors; they are co-creators. That shared ownership not only cuts costs but also strengthens the innovation loop.

On the business model side, revenue will increasingly flow from after-sales and services, not just from vehicle sales. Many OEMs are now selling vehicles with slim margins, betting on charging, subscriptions, data services, and maintenance to bring in revenue later. The ‘vehicle-as-a-service’ model is already unfolding.

Finally, no strategy can succeed without aligning to policy, legal frameworks, and compliance standards. Whether it is emissions regulation, battery recycling mandates, or software over-the-air update laws, it is a dynamic space, and staying proactive is key.

From vision to value

A visual lifecycle chart shows how confidence in execution fades as we move from concept to implementation. While design and ideation are often strong (green zone), execution and scaling quickly dip into the yellow; and that is where we need to focus. Because this transition: this EV versus ICE tug-of-war, is not just about vehicles. It is about mindset, systems thinking, and long-term resilience. It is not just about building a better car. It is about rebuilding the industry from the ground up.

We are not ‘aatmanirbhar’ yet; not in the truest sense, especially when it comes to EVs. The term ‘aatmanirbhar’ has become a rallying cry, echoing across panel discussions and technology summits. However, from our current vantage point, deep within the trenches of product engineering and services, it is clear that we still have some way to go.

When it comes to developing EV electronics, from BMS to motor controllers and other critical modules, we are still heavily reliant on external support, whether that is from global vendors, domain experts, or off-the-shelf solutions. Our integration capabilities: how we manage, interpret, and test the complex data flowing between EV subsystems, are still maturing. We lack confidence in full-stack integration today. But here is the good part: we are on the path. We have to reach there. 

Now, Tier 1 and Tier 2 suppliers are the real enablers here. The industry needs you to step up, to co-create the product engineering journey. From product definition (where we are doing reasonably well) to detailed design and testing, we need to reduce the yellow and red zones on our capability map and turn them green. Yes, today, much of our engineering journey needs hand-holding. But with the right skilling, collaboration, and mindset, we can transform this.

At a recent seminar at the Automotive Research Association of India (ARAI), we showcased a visual maturity map, highlighting areas where we are confident (marked green), areas where we are still learning (yellow), and areas where we are largely dependent on external help (red). It sparked a valuable discussion: should this map be inverted if viewed from a Tier 1 supplier’s perspective? Possibly. But if we remove external support from the picture, we all face the same challenge. And that is acceptable. Growth, as someone wisely said, is silent. Like the caterpillar struggling in its cocoon before it emerges as a butterfly, India’s EV ecosystem is still in metamorphosis.

Hydrogen, hybrids, battery recycling, and material sustainability; these are valid and necessary conversations for tomorrow. But today, our focus should be on building a robust, self-sustaining product engineering pipeline. Hybrids may offer a transitional bridge. The carbon footprint of EVs is still a subject of global debate. But India’s unique opportunity lies in innovating from the ground up.

Let us not be spectators. Let us be the ones who engineer the future.

From assembly to innovation: India’s defining leap

This article is based on a session titled ‘Next Generation Automotive World’ delivered by Dr Ajay Palkar, Ex-SGM, Head – Electrical & Electronics SKODA Auto India  at the EFY Expo held at the Auto Cluster Exhibition Center, Pune, on 15-17 May 2025. It has been transcribed and curated by Akanksha Sondhi Gaur, Senior Technology Journalist at EFY.