7 strong trends in mobility and transportation for 2027

The mobility of the future is happening. AI and software have moved into the core of vehicles, technology is rapidly taking new steps and robot taxis are starting to operate in the world's major cities. All this at the same time as global competition intensifies and growing cities need space for more people and transport in limited spaces. Here are seven trends that are currently redrawing mobility and transport.

Gothenburg shows the way forward for Europe

The automotive industry is one of Europe's heavyweights. Nearly 14 million people work in the sector and, with investments of EUR 85 billion per year, it is Europe's largest private R&D investor.

Mobility and transportation are therefore not only about how we will travel and transport goods, but also about jobs, competitiveness and who will control the technology of the future.

At the same time, the transition has become significantly more complex. China has taken a leading role in electrification and batteries, new technology companies are taking their place in the automotive industry's value chains, and geopolitics affects everything from trade to how data is handled. The transition is moving fast, but not along a single given path.

The Gothenburg region has a central role in the development of the sustainable mobility and transport solutions of the future. Here, the automotive and mobility sector has grown over the past 20 years to well over 50,000 people. Around the global vehicle manufacturers the city hosts development centers, a rapidly growing flora of software and tech companies, test environments and strong universities. Technology developed here is already being used in millions of vehicles worldwide.

Geely Group has located a large part of its European research and development in Gothenburg, and in 2026 it has grown into one of the world's largest car manufacturers. And when the world's two largest truck manufacturers, Volvo Group and Daimler Truck, started a joint venture in 2025 for the software of the future in heavy vehicles, they chose to locate their headquarters at Lindholmen in Gothenburg.

1. Electrification is happening – introduced pragmatically

Electrification can no longer be described as a niche but has become the starting point for the future of the automotive industry. But development does not follow a straight line. Different markets, areas of use and customer needs place different demands and the industry responds by keeping several technical avenues open. Electrification continues, but with greater market realism and technical pragmatism.

After a weak start to 2026, the global electric car market recovered strongly in the second quarter. According to the International Energy Agency (IEA), more than 90 countries recorded an increase in sales in the first half of the year compared to the previous year. For the full year, electric cars are expected to make up almost a third of total car sales in the world.

China is the engine of electrification and accounts for about 60% of the world's electric car sales. But after several years of very rapid growth, the domestic market has slowed down. The country has built up a complete ecosystem for batteries and electric cars, and fierce competition has pushed prices so low that 70% of the battery-electric cars sold in China in 2025 were cheaper than equivalent fossil cars.

In Europe, the market is driven by, among other things, the EU's emission requirements, a growing range of models and increased uncertainty about fossil fuels, which means that many people are seeking control over their fuel costs. After a few weaker years, sales picked up again in 2025 and the upturn has continued in 2026. In the US, several political changes have instead slowed down electrification.

The differences between markets mean that manufacturers are keeping more powertrain options open. In addition to pure electric cars, hybrids and plug-in hybrids have a strong position in many markets, while mild hybrid technology has become common in models with internal combustion engines. In the first half of 2026, electrified powertrains (electric cars, hybrids and plug-in hybrids) accounted for 68% of new registrations in the EU. In Sweden, battery-electric cars (BEVs) and plug-in hybrids (PHEVs) together accounted for 67% of the new car market.

Several paths towards heavy, fossil-free transport

On the heavy side, it becomes clear that there is more than one way forward. The transition to zero-emission vehicles has been slower than many expected, and differences in energy supply, infrastructure and customer needs mean that several powertrains are being developed in parallel: battery-electric, fuel-cell-electric and internal combustion engines powered by renewable fuels.

The Volvo Group, one of the world's largest manufacturers of heavy trucks, buses and construction equipment, had 39% of the European market for heavy-duty electric trucks by the end of 2025 and had delivered nearly 12,000 fully electric trucks since 2021. Range is also becoming less of a limitation. Volvo Trucks' new FH Aero Electric, for example, has a range of up to 700 kilometres.

Germany mobilizes around hydrogen trucks

To accelerate the scale-up of hydrogen-powered fuel cell electric trucks, and bring hydrogen refueling along key corridors, Germany is now bringing together an ecosystem of key players from across the value chain in a joint initiative. In addition to Volvo Group, Daimler Truck and Toyota Motor Corporation, players such as Bosch, Air Liquid, and TotalEnergies are engaged.

Gothenburg a leader in electric buses

West Sweden has also come a long way in the electrification of bus traffic after being an early adopter through the ElectriCity project.  Since 2020, the public transport company Västtrafik has led the development of electric bus traffic in the Nordic region and currently has 700 electric buses in service. Electric propulsion, which was first introduced in city traffic, is now also being expanded to regional traffic. In 2025 and early 2026, Västtrafik deployed 90 electric buses on regional routes. Important steps are also being taken in commercial bus traffic. In the spring of 2026, for example, Volvo's new electric long-distance bus was put into service on the route between Gothenburg and Landvetter airport for Vy Flygbussar.

2. Software revolutionizes vehicles and industry

The automotive industry is moving towards a development where vehicles increasingly function as a digital platform. Behind the shift is the emergence of Software defined vehicles, SDVs, where more computing power and control are gathered in a common digital architecture instead of in separate control units. This means that functions can be developed, reused and improved through over-the-air updates throughout the car's lifetime.

The change is therefore about much more than cars getting more software. When the same digital foundation can be used in several models, the way vehicles are developed also changes. Development cycles can be shortened, functions scaled across entire vehicle families and cars continue to be improved after they leave the factory. The IEA has described this development as a new design paradigm for the automotive industry.

Gothenburg is in a strong position in this shift. In S&P Global Mobility's assessment of car manufacturers' ability to develop software-defined vehicles, Volvo Cars was placed in the highest tier in 2026 – as the only traditional car manufacturer.

The new Volvo EX60 is based on Volvo Cars' proprietary core system HuginCore, which includes electrical architecture, central computing power, zone controls and software. The same technical foundation is used in the EX90 and ES90 and shows how several models can benefit from the same technical and software developments.

Gothenburg gathers a span in vehicle software 

Around the traditional manufacturers there is a rich ecosystem of companies that work with different parts of the software-defined vehicle.

• At Lindholmen is Geely Technology Europe, part of Geely Auto Group's European R&D business, which shapes several of the Group's brands, including Geely, Lynk & Co and Zeekr. This is where the modular CMA architecture is developed, which Geely says is the basis for over 3 million vehicles.
• ECARX in Gothenburg develops comprehensive technology solutions for software and AI-defined vehicles. The company's technology is currently available in over 11 million vehicles worldwide.
• Gothenburg-based HaleyTek develops platform software for Android Automotive, including for infotainment, audio and media.
• WirelessCar, which built Volvo on Call early on, develops connected services for a wide range of global car manufacturers. Is now owned by the Volkswagen Group.
• Nexular shows how Gothenburg-developed vehicle software is also scaled to other types of vehicles and markets. The company's IoT platform connects electric two- and three-wheelers in India and Southeast Asia for remote diagnostics and software updates, among other things.

Read more in 7 tech trends shaping 2026

3. Properly used AI makes driving and traffic safer

Can the car detect a risk of accident before humans themselves have understood that the danger exists? Increasingly often, the answer is yes. AI is being given a growing role in vehicle safety systems and can interpret large amounts of information about traffic, the car and the driver in real time. The systems can detect risks, warn, intervene and, in some situations, completely take over driving.

The development is taking place gradually. Cameras and sensors can now follow the driver's gaze and behaviour and detect fatigue or lack of attention. The EU already requires technology that monitors the driver, and from 2026 Euro NCAP will also place greater emphasis on systems that continuously monitor the driver's eyes and head, assess the driver's condition and can react if the driver becomes distracted or uncontactable.

Gothenburg-based Smart Eye is a world leader in such Driver Monitoring Systems technology, DMS. Since its inception in 1999, the company has grown into a global player in AI-based driver monitoring and recently showcased technology that, without physical contact, can estimate the driver's heart rate and breathing rate.

AI can also combine information from cameras, radar and other sensors, predict dangerous situations and help the car react faster than the driver. Step by step, the boundary is thus being moved between helping the driver and letting AI take over the actual driving.

AI about to take over the Wheel

Self-driving vehicles have long been described as close to a breakthrough. However, the development has been slower than many predicted. The challenge is not just to get a vehicle to drive itself, but to make it wise enough in the enormous variety of situations that arise in real traffic – and to be able to show that the system is actually safer than traffic with human drivers. In addition, the autonomous journeys need to work together with other traffic, and add value to the system.

Alphabet-owned Waymo already runs commercial robot taxis in several US cities, and in 2026, the company's new robot taxi Ojai, developed together with Geely-owned Zeekr, will have started taking passengers. Now Europe is next in line as both Waymo and Uber/Wayve prepare autonomous taxi services in London, and Waymo also in Munich. If it proves to work in some of Europe's most complex traffic environments, the pressure may well increase on other cities to open up for the same development.

Sweden is also on its toes. The Swedish Transport Agency, Drive Sweden and several Swedish cities, including Gothenburg, are now working out rules, responsibilities and conditions for a larger rollout. The goal is for automated road transport to become an integrated part of the Swedish transport system around 2030.

Autonomy is best suited to controlled Environments

Mines, ports, terminals and industrial areas have more limited traffic environments than a city and can therefore offer better conditions for autonomous driving. Here, the technology is already creating value today.

A clear example can be found in Boliden's mine in Garpenberg. There, Volvo Autonomous Solutions has used self-driving trucks to transport rock material in connection with the construction of a new dam. During the project, nearly 700,000 tonnes of material were transported in more than 11,000 transport cycles and the vehicles drove around 56,000 kilometres without a driver.

The example illustrates an important part of the development: autonomy will only take hold where traffic is easiest to control – not where technology is most visible.

Proving that AI is doing the right thing

Teaching an AI to drive is one thing. Proving that it does the right thing when reality doesn't behave as expected is something else. This is a key challenge when it comes to scaling up advanced driver assistance and autonomous systems. The industry must be able to verify that AI systems handle their increased responsibilities in a safe and balanced way. Every time.

Gothenburg has a long tradition in vehicle safety and has taken that responsibility further into the AI era. At AstaZero outside Gothenburg, automated and connected vehicles can be tested in controlled traffic environments where dangerous and unusual situations can be recreated without exposing people to risk. This type of testing becomes increasingly important the more responsibility is shifted from the human to the vehicle's software.

Volvo Cars' subsidiary Zenseact develops all safety-related software for Volvo Cars and Polestar and is considered one of Sweden's most impressive AI companies. With the help of data from cars in real traffic, AI is continuously trained to detect risks. The systems are continuously improved with the absolute ambition of making the roads safer for all road users, including children and cyclists in the cars' surroundings. 

4. Mobility and transport as a service is growing

Owning a vehicle is not always the most important thing. For many journeys, it is the availability of mobility that counts – being able to get where you want to go when the need arises. The same logic is starting to take on greater importance in freight transport, where companies can increasingly buy transport capacity or logistics services rather than the vehicles themselves. 

After years of rapid expansion and fierce competition, shared micromobility seems to be entering a more mature phase. The European fleet of shared electric scooters has declined by 22% since its peak in 2023, while travel reached record levels in 2025, according to Fluctuo's review of 30 European countries.

Fewer electric scooters are thus used more. Some cities have made shared electric scooters and bicycles part of the transport system, while others have banned them completely. According to the same report, Sweden ranks seventh in Europe in terms of the number of shared bicycles, electric scooters and mopeds.

Car sharing is also growing. The number of users in Europe increased from 14.2 million in 2019 to 18.8 million in 2024 and is expected to reach 21.7 million in 2029, according to Statista.

But even if servitization is growing, it does not mean that all business models work. In 2026, Aimo Subscription closed its Swedish operations, at the same time as Gothenburg-developed Lynk & Co is phasing out its own car subscription. Instead, the market seems to favour models where the user gets access to a vehicle or the journey itself when the need arises, without having to dispose a vehicle of their own for a longer period of time.

In the longer term, autonomous driving can reinforce development. When the driver disappears from the calculation, new opportunities open up for services in the borderland between taxis, car sharing and public transport – not least in publicly funded travel.

Multimodal mobility gets a boost from the EU

In May 2026, the European Commission presented three legislative proposals that will make it easier to combine several modes of transport in the same booking. This can give new impetus to so-called Mobility-as-a-Service, where public transport, cycling, micromobility and other transport services are linked together around the traveller's needs.

In 2026, a simpler variant will also be tested in Gothenburg, where public transport and borrowed bicycles will be combined in a joint offer. The purchase of a period ticket provides half an hour of free cycling every day during the same period.

Transport capacity sold as a service

The same logic is becoming more important in freight transport. A company does not necessarily need to own a truck – it needs to have its goods transported efficiently, to the right place and at the right time. With freight-as-a-Service, electrification, charging, energy and digital transport planning can be AI-optimized in a cohesive service.

Swedish Einride, which has its development in Gothenburg, is a good example. In 2026, Einride expanded its cooperation with Paulig on transports for Santa Maria on the Swedish west coast. A 415-kilometre round trip between Landskrona and Kungsbacka will be electrified, while the vehicle fleet, energy use and routes will be optimised in real time.

The service side is also growing at the vehicle manufacturers, which also includes the traditional aftermarket. At the Volvo Group, service accounts for 26% of sales, and the service business has grown by an average of 13% per year over the past five years.

5. Extending the climate transition along the entire value chain

When the powertrain is electrified, the climate hunt continues along the entire value chains of the automotive and logistics industry. Materials, production, energy and recycling will be of greater importance for the vehicle's overall climate footprint and for the industry's ability to achieve set climate goals.

At the same time, the EU is trying to reconcile climate ambition with strengthening the competitiveness of industry. The automotive industry has been given greater flexibility in parts of the climate regulations, while requirements are tightened in other areas. New rules for vehicle circularity cover the entire life cycle – from how the vehicle is designed and what materials are used to dismantling, reuse and recycling.

For the automotive industry, this means that emissions from steel, aluminium, batteries and polymers, among other things, are becoming increasingly important to access. More materials need to be reused and recycled. In Gothenburg, enormous funds are being invested in research and development, in technology-based start-ups and in new production and energy supply facilities that can contribute solutions.

One example is Mission 0 House, initiated by Polestar together with Lindholmen Science Park. There, industry and academia collaborate on new materials and production processes with the goal of eliminating greenhouse gas emissions. In 2025, the initiative was ramped up with almost SEK 100 million in funding over five years. The work spans metals, chemistry and new biomaterials, among other things, and aims at solutions that can be scaled up industrially.

Some new materials are already in series production. Both Volvo Cars and Volvo Trucks have brought decarbonized steel from SSAB into large-scale production. By using low-carbon steel in the frame profiles of 12,000 trucks, Volvo Trucks expects to save 6,600 tonnes of CO₂.

The future of shipping is not a "one-trick pony"

For shipping, the transition is particularly complex. Ships have a long lifespan, energy needs are great, and there is not yet an obvious winner among the fuels and technologies of the future. Swedish shipping companies are at the forefront of the transition and are developing several solutions in parallel. The breadth illustrates the same pragmatism that can be seen for road freight transport:

• Gothenburg-based Stena Line and Wallenius SOL are modernising their fleets with hybrid and multi-fuel vessels that can be adapted to different energy sources as they become available.
• According to the EU's verified emissions data for 2025, Wallenius SOL's Enabler vessels have the  lowest carbon dioxide emissions per transport work in their ship class.
• Furetank had already reached the EU's greenhouse gas intensity target for 2040 by 2025 – 15 years ahead of schedule.
• At the same time, Wallenius is developing wind propulsion through Oceanbird. In the summer of 2026, the first full-scale wing sail prototype was installed on one of Wallenius Wilhelmsen's RoRo vessels.

A greener Port of Gothenburg

New vehicles, ships and fuels alone cannot do all the work. The transition also requires the infrastructure and energy system to develop at the same pace.

The Port of Gothenburg has an important systemic role in this. The Nordic region's largest port is a world leader and aims to reduce carbon dioxide emissions by 70% by 2030, including emissions from ships calling at and leaving the port. The work includes well-developed shore power, infrastructure for fossil-free fuels and electrification. The Gothenburg–Rotterdam route has also been identified as an important green corridor for fossil-efficient maritime transport, with traffic scheduled to start in 2026.

Of particular interest is the Tranzero initiative, in which the Port of Gothenburg collaborates with Volvo Group, Scania and Stena Line to accelerate the transition to fossil-free transport through more electric trucks in the port area and good charging opportunities. The next step, Tranzero Energy, raises the collaboration to another level of system. When ports, vehicle manufacturers, shipping companies and other industries electrify at the same time, access to electricity, grid capacity and power becomes a strategic issue that is driven forward jointly.
 

6. Cities like Gothenburg take command in the mobility transition  

Our big cities are facing a double challenge. More people and more goods must be able to move smoothly, while emissions and congestion must be reduced and more functions compete for the same limited urban space.

Electrification is an important part of the solution, but it does not solve everything. An electric car takes up as much space as a petrol car, and an electric truck still contributes to congestion. Therefore, the transition is also about how people travel, how goods are transported and how the city's streets and surfaces are used.

Around the world, cities are therefore taking a more active role. They own the issue of how street space is used and by which vehicles.

• Paris continues to redistribute street space from car traffic to walking, cycling and greenery, and decided in 2025 that another 500 streets will be made car-free.
• Amsterdam uses a different tool and has introduced zero-emission zones for new light transport vehicles and trucks, among others.

But despite high ambitions, progress is slow. A global analysis of urban mobility by BCG shows that 95% of cities have set goals for shifting travellers from private cars to more sustainable alternatives. Despite this, cities are 10-15 percentage points behind the development required to reach their own mobility goals for 2035.

An important conclusion is that individual measures and pilot projects are not enough. Cities need to become more active orchestrators of the entire mobility system – and combine urban planning, infrastructure, regulation, procurement and new innovative solutions.

Gothenburg uses the entire toolbox

In Gothenburg, the climate impact from transport is to be reduced by at least 90 per cent by 2030 compared to 2010, while motorised road traffic work is to be reduced by 25 per cent compared to 2020.

Efficient public transport and electrification are necessary parts of the transition. But as the city grows, the limited space also needs to be used more efficiently. Gothenburg is therefore working in parallel with walking, cycling and micromobility, setting requirements and procurement, as well as new solutions for how people and goods can move through the city.

Freight transport is becoming an increasingly important part of the equation; in Gothenburg, it accounts for about 10% of total traffic. They need to be reduced at the same time as the transport work – the benefit – needs to increase. The city is working on several measures for more efficient freight traffic. These are just as important for the space-efficient city as new solutions for passenger travel.

Gothenburg steps up the requirements for electric operation

From 2026, seven bodies within the City of Gothenburg will introduce common electrification requirements in procurements for building and civil engineering contracts. The proportion of electric operation will be increased gradually, with the goal that at least 70% of all used vehicles and work machines will be electrically powered by 2030. The requirements apply both at the construction site itself and for in- and outbound transports.

When several of the city's largest clients set the same long-term requirements, a more predictable demand is created. This reduces the risk for contractors who need to invest in electric vehicles, work machines and charging solutions.

Gothenburg is the first in Sweden and one of the cities in the world that is leading the way in bringing together an entire city group around requirements for electrically powered contracts. 

7. Redrawing the global map for the automotive industry

The global balance of power in the automotive industry is being shaken. Europe has long dominated large parts of the world market, not least the premium segment, with advanced engineering and strong global brands. But in the shift to electric power, the playing field has changed.
 

China has become the world's largest car exporter. As growth in the domestic market slows down, the pressure on Chinese manufacturers to grow internationally increases. At the same time, European manufacturers are losing ground in China. German car giants Volkswagen, Mercedes-Benz, BMW and Porsche, for example, saw their sales in China fall by 30-41% in the second quarter of 2026 compared to the previous year.

The development is also hitting western Sweden, where many subcontractors are integrated into European and, not least, German value chains. But at the same time, the technology shift is opening new markets for companies in areas such as electronics, batteries, software and advanced services.

Competition will intensify further when battery prices fall and cheaper electric cars reach the market. The next phase of electrification is therefore not just about who can build a good electric car – but who can build it cheaply enough and at the same time make money on it.

Clear swing towards regionalisation

The automotive industry has become a strategic issue for the world's major economies. It is about jobs and exports, but increasingly also about technological independence, security and control over critical supply chains.

The US tariff policy makes it more difficult to export to the US market, while Chinese manufacturers are establishing production closer to their export markets. The EU combines countervailing tariffs on Chinese electric cars with investments in strategic production in Europe. For example, the Battery Booster programme invests EUR 1.5 billion in interest-free loans in European battery cell production.

After decades in which the automotive industry's value chains have become increasingly global, geographical origin is now gaining greater importance again. Production is moving closer to the markets where the vehicles are to be sold, and politics is gaining greater influence on companies' investment decisions.

This does not mean the end of the global automotive industry. But globalisation is complemented by clearer regionalisation, with Europe, China and North America trying to secure larger parts of their own strategic value chains.

New technologies change the competitive landscape

The parts that are strategically important in the car are changing. Competition is no longer just about engines, chassis and efficient production. Batteries, semiconductors, AI, software and data are becoming increasingly important for both the function of vehicles and where value in the industry is created.

This makes control of technology and supply chains a competitive issue. Europe's dependence on imported components is greater for electric cars than for cars with internal combustion engines – on average 29% compared to 13% – while demand for advanced semiconductors is growing rapidly outside the automotive industry as well.

The companies and regions that master these new control points will therefore have a stronger position when the automotive industry's value chains are redesigned.

What does the development mean for Gothenburg?

Gothenburg and Western Sweden are deeply integrated into the global automotive industry and are directly affected when markets and value chains change. At the same time, the region's complete automotive cluster has strong and growing operations in several of the areas that are growing in importance – electrification, software, AI and safety. 

Just north of Gothenburg’s city centre, on the Hisingen Island, there is a concentration of talent, know-how and strong development environments around Lindholmen, Lundby and Torslanda. Through the initiative Next Innovation Destination Torslanda, additional environments for development, testing and innovation will be added.

But a strong industrial history is no guarantee of future competitiveness. When technology shifts are rapid, the ability to translate research and innovation into profitable products and growing companies becomes increasingly important. The large industrial companies need to be able to develop and scale new solutions together with suppliers, smaller technology companies, academia, customers and societal actors.

A few aspects are worth noting: Through its ownership structure, Volvo Cars has a uniquely close relationship with the Chinese ecosystem that can provide both speed and cost benefits. The Volvo Group, for its part, is building alliances with major global players to take major strategic steps forward in charging infrastructure, software and hydrogen power.

Gothenburg's long experience of collaboration between business, academia and the public sector is a competitive advantage in this context – if this leads to rapid development and commercialisation.