Transport innovation is now a baseline requirement for survival in the mobility sector. With global transport systems facing rapid disruption, innovation in both public and private mobility has become an operational imperative. From electrification and automation to new business models in shared mobility, the industry is undergoing its most significant transformation in decades.
Consider policy and regulation. As of 2024, over 25 countries have committed to phasing out sales of new internal combustion engine vehicles by 2035 or earlier. Meanwhile, consumer demand for greener, smarter, and more affordable transport solutions continues to rise. Add to this the economic volatility around fossil fuel prices, and the case for accelerating automotive innovation becomes even more urgent.
We’re also seeing a surge in enabling technologies – from connected vehicle ecosystems and EV infrastructure to predictive maintenance and multimodal platforms – all of which are redefining how transport systems are designed and delivered.
The opportunity is massive, but so is the complexity. In this article, we’ll unpack the key trends driving transport innovation today across automotive, rail, and air sectors. We’ll also explore how organizations can move from reactive adaptation to proactive leadership – by embedding structured innovation management at scale.
Product Innovation in Transportation: The Next Generation of Vehicles
Across the global mobility landscape, transport innovation is increasingly centered on sustainability and systems-level transformation. Nowhere is this shift more visible than in the automotive sector, where the push for zero-emission vehicles is reshaping how cars are designed, manufactured, and brought to market.
The pace of automotive innovation is accelerating rapidly, powered by consumer demand, regulatory pressure, and intense competition. For manufacturers and mobility providers, the strategic challenge is no longer whether to innovate, but how.
Should you build proprietary technology from the ground up, invest in partnerships with emerging startups, or license proven solutions? Should your organization bet on a single path forward, or hedge across multiple platforms and fuels? These questions are becoming more urgent as new vehicle categories and technologies emerge.
Electric Vehicles (EVs): Gaining Ground, But Still Evolving
Battery electric vehicles (BEVs) are leading the mainstream shift away from internal combustion. Globally, EVs accounted for 14% of all new car sales in 2023, up from 9% in 2021, and growth is expected to continue in double digits through the end of the decad.
Battery EVs are leading in Europe and the US, but hydrogen-powered vehicles present a serious alternative. They offer longer range and faster refueling, though current infrastructure heavily favors batteries. Should automakers develop both technologies, or choose one based on regional outlook? Much like the Blu-ray vs. HD-DVD battle, early bets could define future competitiveness.
New technologies are extending automotive innovation into less traditional formats. Lightyear is developing solar-assisted EVs with a 500-mile range. In the UK, Echion Technologies is working on self-charging trains. In Stockholm, Candela’s electric hydrofoil ferries are being integrated into public transport.
As electric vehicle adoption surges, automakers and governments are focusing on what happens after a battery’s first life. Battery circularity – recycling and repurposing EV batteries – is now a key area of automotive innovation.
- Companies like Redwood Materials, Northvolt, and Ascend Elements are building closed-loop systems to recover valuable materials like lithium, nickel, and cobalt.
- Spent EV batteries are increasingly used in stationary energy storage, supporting grid resilience and renewable integration.
Circular battery systems reduce raw material demand, lower environmental impact, and offer new business models for OEMs.
Greener Airplanes
Airlines are under pressure to decarbonize, but hydrogen and electric planes remain years away from scale. In the meantime, sustainable aviation fuel (SAF) is emerging as the most immediate and viable solution.
Made from non-petroleum feedstocks such as waste oil, algae, and municipal solid waste, SAF can reduce lifecycle emissions by up to 80%. It works with existing aircraft and infrastructure, making adoption straightforward – and increasingly mandated.
- United Airlines, Lufthansa, and Air France-KLM have incorporated SAF into regular operations.
- The EU now requires that 2% of aviation fuel used at European airports be SAF by 2025, rising to 70% by 2050.
- Multiple countries, including the US and UK, offer tax credits and subsidies to boost SAF production.
For aviation stakeholders, SAF represents not just a compliance issue but an opportunity to lead in sustainability strategy while future technologies mature.
AI and Automation
After more than a decade of development, autonomous vehicles are approaching real-world deployment. The UK is planning to allow fully autonomous cars on public roads by 2026, while in China, Pony.ai is already carrying out driverless testing of its ‘robotaxis’ in Beijing.
Autonomous technology is also transforming how vehicles are conceptualized. Several manufacturers are now designing interiors as multi-use spaces, anticipating a future where driving is optional. Kia, for example, recently unveiled its Platform Beyond Vehicle (PBV) lineup, featuring customizable, modular interiors for work, leisure, or transit – showing how autonomous capabilities are reshaping both function and form in automotive design.
We are witnessing two major shifts in automotive innovation at once: the rise of autonomous driving and the reinvention of vehicles as multi-purpose environments. With pressure to innovate across multiple fronts simultaneously, manufacturers need robust
Service Innovation in Transportation: The Next Generation of Customer Experiences
Many of the same forces driving transport innovation – sustainability, new technology, and changing consumer expectations – are also reshaping the passenger experience. For organizations exploring how to adapt, customer feedback is one of the most valuable inputs. What do your customers expect, and how should service design evolve alongside product innovation?
Services Linked to Green Innovations
A perfect example of that second question is the way that EV manufacturers are offering services for consumers to enjoy while they recharge their cars. Audi is rolling out its own charging hubs with lounges where drivers of its cars can relax while they wait. Volvo has partnered with Starbucks to install EV chargers at locations along a 1,350 mile route between Denver and Seattle. Any EV driver will be able to pay to use these chargers, but Volvo drivers will be able to charge at no cost, or at lower rates.
Unlike gas stations, which are typically third-party-operated, EV infrastructure is becoming a branded customer experience. As a result, automotive companies are stepping into roles traditionally held by retailers and hospitality providers – an evolution that reflects the growing integration of automotive innovation with lifestyle services.. Tesla is currently working on installing a diner and drive-in movie theater at some of its EV charging stations.
Consumer demand for sustainable transport is changing the shape of rail services too. Services such as Nightjet and others are leading a resurgence in the sleeper train as consumers are willing to trade speed for more comfortable experiences.
Mobility-as-a-Service (MaaS)
Big data is enabling radical changes to the way customers can plan and pay for public transport. MaaS combines multiple datasets from various transport providers to offer a single digital touchpoint to pay for journeys that might combine car share or taxis, rail, buses and e-bikes in a single transaction. Users can enter their destination and a MaaS app will suggest the quickest or cheapest routes covering every leg of the journey.
Helsinki’s Whim app has led the way since 2016, offering travelers both pay-per-ride and subscription payment options. The rest of the world has been slow to catch up, but MaaS is finally expected to make big waves in urban transport around the globe.
AI-Powered Transit Optimization
AI and real-time data are helping transit operators deliver more efficient, responsive services. Through predictive analytics and demand forecasting, AI-powered mobility platforms can dynamically adjust routes, timetables, and fleet allocation.
- Companies like Optibus, Via, and Moovit are enabling smart bus and shuttle networks in cities across Europe, the US, and Asia.
- These systems help reduce wait times, optimize occupancy, and lower emissions – while improving rider satisfaction.
This is a strong complement to Mobility-as-a-Service (MaaS) platforms, and shows how public and private transport can become more adaptable through software innovation.
Driving Transport Industry Innovation with Innovation Management
All of the transport innovation trends we’ve explored so far relate to product and service innovations, but a third type of innovation, process innovation, can be just as valuable to organizations and help them to meet the challenges and opportunities of the future. Continuous improvement practices are used to deliver these incremental innovations to improve processes.
Disruption is touching every corner of the transportation industry, and innovation is the only way to navigate through the turbulent changes ahead. Innovation management offers the most steady and certain roadmap to get there. As we’ve seen, several leading transport brands are funding or working with startups to incorporate their technology into their own innovations, and to do that an effective innovation technology scouting process is required.
We’ve also only scratched the surface of the trends shaping automotive innovation and mobility more broadly. To turn trend insights into real opportunities, organizations are increasingly adopting trend management software that helps teams monitor signals, map impacts, and trigger ideation initiatives.
Innovation management software, which incorporates all of these solutions and more, exists to help organizations innovate and take advantage of the types of opportunities we’ve explored in this article.
Transport Innovation: Common Questions Answered
What are the major transport innovation trends in 2025?
The most impactful trends in 2025 include electrification of vehicles, battery circularity, sustainable aviation fuel (SAF), autonomous vehicles, Mobility-as-a-Service (MaaS), and AI-powered transit optimization across road, rail, and air sectors.
How are airlines reducing emissions today?
Airlines are adopting sustainable aviation fuel (SAF), which can cut lifecycle emissions by up to 80% and is compatible with current aircraft. It’s already in use by United Airlines, Lufthansa, and Air France-KLM and is mandated in the EU from 2025.
How is AI used in public transportation?
Transit operators use AI to optimize routes, predict demand, and allocate vehicles more efficiently. Platforms like Optibus and Moovit help reduce wait times, cut emissions, and improve rider satisfaction in cities worldwide.
What is Mobility-as-a-Service (MaaS)?
MaaS platforms integrate multiple transport modes – such as buses, trains, taxis, e-bikes, and car shares – into a single app. Users can plan and pay for multi-leg journeys with ease, as seen in Helsinki’s Whim app and other global pilots.
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