Five automotive trends to watch out for in 2023

The automotive industry is undergoing a rapid transformation, and the changes over the next 12 months are likely to be significant. As the industry moves towards a more sustainable and “green” future, the way we use and interact with cars is likely to change dramatically alongside. This is partly driven by the continued rise of electric vehicles (EV), with EV’s securing a 15.1 per cent share of the UK's new car market as of December 2022.

Last year also saw further progress made on the development, management and roll out of automated vehicles (AV) - a process that Shoosmiths supported by responding and helping shape the recommendations put forward by the Law Commission of England and Wales and the Scottish Law Commission in its report on legal reforms to allow the safe introduction of automated vehicles.

The development of these new technologies combined with the macroeconomic and global policy landscape will only serve to hasten the pace of change for the industry – not only impacting the types of vehicles manufactured, but also how they are brought to market and utilised by customers. 

Investigating some of these changes and what is in store for the automotive industry in 2023 is partner and head of Shoosmiths’ mobility sector, Jonathan Smart, who shares his thoughts on several key trends and the potential roadmap for the sector over the next 12 months.

Car buying experience 

How we purchase vehicles is changing. As seen in other consumer facing sectors like FMCG and financial services, 2023 could see an acceleration from automotive manufactures in adopting new direct routes to market, complimenting the traditional indirect routes through distributors.

This model has been proved by the likes of Tesla and Polestar, which focus on selling direct to consumers, without an independent retailer network enabling manufacturers to set pricing.

The sector’s shift to agency models is taking place in the context of an expanded focus on agency in the Competition and Market Authority’s guidance on how competition law applies to vertical agreements, with the possibility of further guidance yet to come in the CMA’s proposed guidance to accompany the anticipated new UK Motor Vehicle Block Exemption.


Tying in with changes to the car buying experience is the growth of digitalisation and its potential use in the sales process. Many automotive manufacturers already allow consumers to purchase vehicles online – estimates show 10 per cent of UK car sales are made via the internet.

It is likely that this trend will continue with dealerships looking to remain competitive by adopting new technology, including offering virtual walk-arounds and an online sales service, while also facilitating at-home test drives and vehicle home delivery. The integration between online and in person sales services is set to become even more integrated as many brands continue the transition from distribution style models to selling direct through agency sales models (see point 1 above). 

Connected vehicles

Major advances continue to be made in wireless connectivity, enabling vehicles to communicate with their external environment, other vehicles and devices within them.

This technology is transforming the travel experience and on-demand features now available - supporting internet use, entertainment and even making payments through a vehicle.

Connected cars can also use digital data and remote diagnostics to provide vehicle health reports, data-only telematics and provide early warning of issues to prevent breakdowns.

These developments are not only revolutionising the travel experience, but also pose new opportunities for vehicle manufacturers to utilise any collected data, alongside further collaborating with technology and telecoms companies as has been seen in the last week at CES 2023. It does also pose potential new challenges for the industry, especially around how technology is licenced and used.

Focus on the battery supply chain

Supply chain disruption, particularly around semiconductor shortages and raw materials and minerals for lithium-ion batteries, remains a core issue for the automotive sector. The transition to electrification is putting particular pressure on the raw materials required for battery manufacturing and many in the sector are expecting shortages to cause disruption until 2026. 

This creates several challenges for vehicle manufacturers and wider society. It is also compounded by a shortfall in charging infrastructure and its potential impact in terms of stalling the UK’s EV transition and move to net zero.

Innovative solutions and increased collaboration are required to overcome these hurdles and it is likely that 2023 will see further attention paid to battery manufacturing, supply chains and ways to meet the increasing demand for EV charging. This could mean further investigating the role technologies like Battery-as-a-Service could play, both in terms of supplementing current charging infrastructure, but also creating new battery recycling and reuse opportunities as many brands turn to a greener supply chain to overcome raw material shortages. What we expect is that many manufacturers will move away from “just in time” manufacturing strategies; the risks may be too great in 2023....


Analysis by McKinsey shows that the automotive revenue pool could significantly increase and diversify through the adoption of on-demand mobility services and data-driven services. It believes this could create up to $1.5 trillion - or 30 per cent more - in additional revenue potential in 2030 as consumer preferences around using vehicles continues to change.

While traditional automotive sales are expected to continue growing in the long-term, buoyed by the roll out of electric vehicles, it may come as no surprise if 2023 sees the conversation intensify around the future of transport and also the potential role of Mobility-as-a-Service.


The future of the automotive industry is undoubtedly electrified, autonomous, shared and connected. It is an exciting, if not sometimes nail-biting, time to be in the automotive industry as 2023 will undoubtedly see these trends continue. 

As we enter 2023, automotive manufacturers must continue to be strategic about which parts of the connectivity ecosystem they engage with and control in order to benefit from the development of new technologies and systems, including the opportunities associated with monetising vehicle data

The same point stands with the move to electrification and the role new charging technologies like the Battery-as-a-Service model could play in meeting user demand. These technologies may not be the silver bullet for EV charging infrastructure, but must be considered by the industry and government to aid the EV transition and deliver plans to halt the sale of new petrol and diesel cars by 2030.


This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.


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