JSAE 2026: what global automotive trends mean for UK competitiveness
by Hadi Moztarzadeh, Head of Technology Trends
The global automotive industry is entering a new phase, one in which competitiveness will increasingly depend not on individual technologies, but on how effectively electrification, software, artificial intelligence (AI), advanced manufacturing and resilient supply chains can be brought together.
That was one of the clearest messages from the Japan Society of Automotive Engineers (JSAE) Annual Congress and Automotive Engineering Exposition 2026, held in Yokohama from 27 to 29 May.
Bringing together automotive engineers, R&D and industry leaders and policymakers, this year’s event explored the future of cars and mobility created through technology integration and co-creation. Across the congress and exhibition, it was clear that the automotive industry is undergoing significant technological and structural change.
For the UK, these trends highlight both the scale of global competition and the opportunity to build on our strengths in automotive innovation, advanced manufacturing and technology development.
Electrification: from technology race to efficiency and competitiveness
Electrification remained a dominant theme at JSAE, but the focus is increasingly shifting beyond battery capacity and vehicle range towards whole-vehicle efficiency, affordability and competitiveness.
Global competition continues to intensify as manufacturers across China, the US, Europe and Southeast Asia scale rapidly, supported by evolving regulation and incentives for zero-emission vehicles.
Future competitiveness will increasingly depend on effective technology integration, bringing together batteries, thermal management, power electronics, motors and software control systems. At the same time, markets including Japan continue to pursue a technology-diverse approach to decarbonisation, spanning battery electric vehicles (BEVs), hybrids, fuel cells and alternative fuels.
Software-defined vehicles move towards industrialisation
Another significant theme was the continued transition towards Software-Defined Vehicles (SDVs).
SDVs are moving from concept towards industrial-scale implementation, with centralised and zonal electrical/electronic architectures, high-performance computing, networking and over-the-air updates becoming increasingly fundamental to future vehicle architectures.
This is also transforming how vehicles are developed. Digital engineering, model-based systems engineering, virtual validation and digital twins are becoming increasingly important in reducing development time and cost while managing growing system complexity.
The ability to integrate hardware, software and systems engineering into faster and more efficient development processes will therefore become an important source of competitive advantage.
These trends closely reflect APC’s own analysis of the emerging SDV landscape. Our recently published SDV value chain report explores the opportunities for the UK and is designed to help guide automotive R&D priorities and associated investment in this rapidly evolving area.
AI is becoming a competitiveness tool
Connected and automated mobility (CAM), cybersecurity and AI also featured prominently at JSAE.
CAM continues to attract substantial investment, particularly in technology development and adoption, AI-based decision-making and safety validation, alongside the continued evolution of supporting regulatory frameworks. As vehicles become increasingly connected and software-defined, cybersecurity is also becoming fundamental to vehicle safety and resilience.
But the application of AI across automotive is becoming much broader than automated driving alone.
From software development and virtual testing to predictive diagnostics, manufacturing optimisation and personalised vehicle experiences, AI is increasingly being applied across the automotive value chain.
This means AI is emerging not simply as a discrete technology area, but as a wider productivity and competitiveness tool for the industry.
Manufacturing productivity comes into sharper focus
Perhaps one of the most significant themes for the UK was the growing emphasis on manufacturing innovation and productivity.
Automotive businesses are being challenged to invest simultaneously in electrification, software, AI and new vehicle architectures, while also reducing costs and shortening development times.
The transition from internal combustion engine (ICE) to BEV manufacturing also requires a fundamental rethink of production processes and supply chain structures. This extends beyond EV powertrain systems to non-powertrain commodities across the vehicle.
Digital engineering, automation and AI-assisted development will therefore become increasingly important in improving manufacturing efficiency while reducing cost and complexity.
These trends closely align with the expanded scope of the UK Government’s DRIVE35 programme. Through DRIVE35, APC is developing a framework to support manufacturing competitiveness across the end-to-end automotive value chain, helping UK industry respond to many of the global shifts evident at JSAE.
Creating international opportunities for UK automotive innovation
Alongside observing these wider industry trends, JSAE provided an important opportunity for APC to showcase UK automotive capabilities and strengthen relationships with international technology and supply chain partners.
As in previous years, APC operated the UK Government Pavilion, showcasing UK strengths in automotive innovation, electrification and sustainable manufacturing.
We also facilitated roundtables, strategic supply chain engagements and focused events, creating opportunities for meaningful discussions between Japanese technology and supply chain leaders and UK automotive innovators.
Critical minerals recycling was a particular focus, including the recovery of battery materials and permanent magnets.
The UK has an opportunity to develop capabilities to recover lithium, cobalt, nickel and manganese from end-of-life batteries, alongside rare earth elements such as neodymium from permanent magnets used in electric motors.
At JSAE, APC presented UK demand and opportunities in critical minerals recycling, with the work featured in the congress proceedings.
Developing these capabilities could help reduce dependence on primary extraction, strengthen critical mineral supply chain resilience and support localisation ambitions across the UK and Europe. It could also provide a strong basis for international investment and technology collaboration, combining UK innovation with international manufacturing scale, feedstock and supply chain networks.
Connecting UK capability to a changing global industry
JSAE 2026 demonstrated that automotive competitiveness is increasingly defined not by individual technologies in isolation, but by the integration of electrification, software, AI, advanced manufacturing, circularity and resilient global supply chains.
For the UK, the opportunity lies in connecting our strengths across these areas: developing domestic capability while maintaining strong international relationships with technology leaders, suppliers and investors across Japan and the wider Asian automotive ecosystem.
As global competition intensifies, international collaboration will remain critical to translating UK automotive innovation into long-term industrial and economic value.
Explore other APC industry insights reports in our Knowledge Base.