Global automotive trends, challenges and forecasts

In the February 2026 issue of ISMR, we highlight a selection of market challenges, trends and forecasts for the global automotive industry.

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The global car industry is a cornerstone of many national economies, directly employing more than 10 million people worldwide and supporting millions of additional jobs. The market for cars is one of the largest for a single product — and cars are the single largest source of global oil demand today,” said IEA (International Energy Agency) Executive Director, Fatih Birol.

New market entrants are capturing an increasingly large share of electric car sales. However, the industry is navigating trade shocks, supply chain bottlenecks and shifting consumer expectations. Electrification is advancing but losing momentum as affordability constraints, policy uncertainty and infrastructure gaps slow adoption.

“The geography of car markets is changing. China and other emerging economies now account for over half of global car sales, up from just 20% in 2000. Additionally, after more than doubling its car production between 2010 and 2024, China now accounts for 40% of global car manufacturing capacity, while Europe and North America each account for 15%. China overtook the European Union to become the world’s largest car exporter in 2024, and around 70% of electric cars sold worldwide today are produced in China,” said the IEA in its new report “What’s Next for the Global Car Industry.”

Market challenges and forecasts

The global push towards reducing carbon emissions is also driving the significant adoption of electric vehicles. Government incentives, improved battery technology and growing charging infrastructure are making EVs more affordable and practical.

However, challenges such as stringent emissions regulations, high production costs, supply chain disruptions and varying regional policies may limit growth and profitability for automotive manufacturers and suppliers.

To read the rest of this article in the February 2026 issue of ISMR, see https://joom.ag/yFEd/p16