As the automotive world pivots toward a future defined by electrification, safety, and digital innovation, two recent reports paint a vivid picture of both the promise and the pitfalls facing the global passenger vehicle market. On September 16, 2025, the Insurance Institute for Highway Safety (IIHS) released a comprehensive evaluation of seven leading electric vehicles (EVs), revealing a nuanced story of progress in driver protection but lingering concerns for rear passenger safety. Meanwhile, Future Market Insights (FMI) projects the global passenger vehicles market will surge from USD 1.9 billion in 2025 to a staggering USD 4.4 billion by 2035, fueled by shifting consumer demands, technological leaps, and a worldwide push for sustainable mobility.
According to the IIHS, the tested EVs—the 2025 BMW i4, Chevrolet Blazer EV, Ford F-150 Lightning, Nissan Ariya, Tesla Cybertruck, Tesla Model 3, and Volkswagen ID.Buzz—offered "excellent protection for the driver and solid protection for rear passengers." However, as the institute’s updated moderate overlap front crash test revealed, not all vehicles are created equal when it comes to safeguarding those in the back seat. This test, which simulates an offset collision at 40 miles per hour, now includes injury data from a rear-seat dummy, a change IIHS introduced in 2022 to "push manufacturers to address [the] gap" between front and back seat safety advancements.
In this round of testing, the i4, Blazer EV, Cybertruck, and ID.Buzz earned IIHS’s highest “good” rating for crash performance. The Tesla Model 3 was rated “acceptable” due to what IIHS described as a “somewhat elevated” risk of chest injuries for rear passengers. The Nissan Ariya received a “marginal” rating, with a high risk of chest injuries for those in the back seat. The Ford F-150 Lightning fared worst, receiving a “poor” rating because of high risks of chest, head, and neck injuries for rear seat passengers, as well as an increased risk of internal injuries due to lap belt movement.
IIHS’s findings underscore the evolving expectations for safety in an era when EVs are rapidly gaining ground. The institute’s move to spotlight back seat safety is already nudging automakers to rethink cabin design and restraint systems. As Joe Young, IIHS director of media relations, noted in a video accompanying the release, "Headlight performance stood out, as the illumination ratings suggest room for improvement across the board." Not a single vehicle in the test group achieved a “good” headlight rating. Five—Blazer EV, F-150 Lightning, Ariya, Model 3, and ID.Buzz—received “acceptable” marks, while the i4 ranged from “marginal” to “poor” depending on the trim. The Cybertruck, meanwhile, was dinged with a “poor” rating due to excessive glare.
Pedestrian crash avoidance, on the other hand, was a bright spot. All seven EVs earned either “good” or “acceptable” ratings in this crucial category, reflecting a broader industry trend toward integrating advanced driver assistance systems (ADAS) and smart braking technology. These features are increasingly standard as automakers race to meet both regulatory demands and consumer expectations for safety-first vehicles.
This focus on safety dovetails with broader shifts in the global passenger vehicle market. FMI’s new report highlights a remarkable projected growth trajectory: from USD 1.9 billion in 2025 to USD 4.4 billion by 2035, representing a robust compound annual growth rate (CAGR) of 9.0%. The market’s expansion is propelled by a confluence of factors—urbanization, rising disposable incomes, and a hunger for vehicles that blend fuel efficiency, digital features, and style.
“Passenger vehicles are no longer just a means of transportation—they are lifestyle products shaped by safety, comfort, design, and performance,” FMI’s analysis observes. SUVs in particular are surging, expected to command 36.9% of the market in 2025, while personal use vehicles make up nearly 59.1% of all passenger car applications. The propulsion landscape remains diverse: internal combustion engine (ICE) vehicles are set to retain a 41.8% share in 2025, buoyed by established infrastructure and ongoing efficiency gains. Yet the tide is clearly turning, with electrification and hybridization trends expected to drive significant incremental growth through 2035.
Regionally, China continues to dominate as the world’s largest and fastest-growing passenger vehicle market, with a forecasted 2% CAGR through 2035. Government incentives for EVs, strong local manufacturing, and a burgeoning middle class are fueling this ascent. India is not far behind, with a 3% CAGR projected, spurred by infrastructure investments and a growing appetite for both EVs and fuel-efficient ICE vehicles. Europe, led by Germany’s 4% CAGR, is seeing rapid EV adoption thanks to robust automaker support and government subsidies. In the United States, demand for SUVs, trucks, and premium passenger cars remains strong, with a steady 7% CAGR and major investments in connected, autonomous, and electric vehicle platforms.
Yet, as the market booms, so do the challenges. Regulatory compliance and emission standards are pushing up production costs, while semiconductor shortages and raw material supply chain disruptions continue to bedevil automakers. Intense competition—across both ICE and EV segments—means that companies must innovate relentlessly just to stay afloat. As FMI notes, "Collaborations with charging infrastructure providers and mobility platforms are expanding ecosystems for both established and emerging automakers."
The competitive landscape is a mix of established giants and nimble newcomers. Ford Motor Company is expanding its electrification strategy while working to boost traditional ICE vehicle efficiency. Tesla remains the industry’s disruptor, pioneering battery technology, autonomous driving, and direct-to-consumer sales. Asian powerhouses like Geely and SAIC are ramping up EV production, while BYD has emerged as a leader in China’s rapidly growing EV market. Meanwhile, Kia and Changan are diversifying with a mix of fuel-efficient ICE models, hybrids, and full EVs.
For consumers, these trends mean more choices—and more complexity. The SUV’s popularity endures, thanks to its versatility and comfort. Digital-first design is now a must, with infotainment, telematics, and connected features central to new launches. Safety is paramount, as automakers roll out ADAS technologies like lane-keeping assist, adaptive cruise control, and automatic braking. And while ICE vehicles remain dominant for now, the next decade promises an accelerating shift toward electric and hybrid models as infrastructure, affordability, and technology improve.
Despite the headwinds, the industry’s trajectory seems clear: passenger vehicles are transforming from mere conveyances into sophisticated, connected, and safer machines. The IIHS’s latest safety tests are a timely reminder that, even as cars get smarter and greener, the basics of occupant protection and visibility can’t be overlooked. For automakers and drivers alike, the journey toward safer, more sustainable mobility is just getting started—and the road ahead is sure to be eventful.
