Proliferation of Technology in Vehicles: Trends and Segments to Watch in 2025

Given the relative softness of some of the traditional parts of the market, investors started to ask, “where should we look next?” The average vehicle produced today has over 30,000 thousand components, sophisticated technology, and over 150 million lines of code. The number of moving parts and complexity has increased meaningfully over the last five to six decades since the muscle car heyday of the 1960s.

Examples of trends and segments to watch include:

• Active safety is becoming more prevalent in vehicles with more sensors and technology. As a car with adaptive features is repaired through maintenance or post-collision, the need to recalibrate these sensors is a specialized skill and technology set that will be needed for a small but growing set of the car parc.
• As the age of the car parc has increased and the number of times that a vehicle can be sold increases, businesses providing services to the sales channel like vehicle reconditioning, paintless dent repair, and other marketing-related services will likely increase.
• Consumers continue to look to the internet to buy a host of products and continue to search for both enthusiast and replacement products on the internet. Businesses with strong eCommerce sales capabilities will continue to be attractive.
• Many of the EVs sold today are to vehicle enthusiasts who desire the latest technology and features that a new EV provides. There are, however, only a few businesses focused on creating accessories and content specifically for the new EV models like the traditional Tesla Models S and 3, Rivian R1T and R1S, or the host of other new products that are enthusiast-eye-catchers. We think this segment of the market is ripe for the picking of companies dedicated to providing products offered specifically for these models. While some EV-oriented policies might change, we still believe—as we wrote about in our synopsis from the 2023 Aftermarket Week—that aftermarket supply to the EV market is a large growth market and one that is poised to grow.

Our automotive & aftermarket investment banking team has a deep understanding of the strategic, financial, and operational factors impacting middle market companies and has a long track record of success in representing companies in automotive aftermarket M&A advisory. We welcome the opportunity to learn how we can assist you in navigating today’s dynamic M&A environment and to help you maximize your strategic objectives.