Review 2025 and trends for 2026: Who dares to look into the crystal ball?

The year is coming to an end. A lot has happened, both positive and negative. I prefer to stick to the positive trends: For example, I find it encouraging how much movement SysML v2 has brought to the world of systems engineering. Not only established manufacturers are adopting the standard, but also innovative start-ups that are tackling the topic of MBSE with new approaches. Perhaps MBSE 2025 will become mainstream sooner than I previously feared?

The topic of „speed“ definitely dominated this year: both for the industry (keyword „China speed“) and for me personally (my book project Product Velocity). After increasing complexity was a brake for a long time, artificial intelligence is developing into an important driver for speed.

What else is there to report in the 2025 review and what trends are emerging for 2026? Spoiler: Automotive will not emerge from the crisis next year, quite the opposite...

Review 2025: SysML v2 on the rise

2025 was an important year for SysML v2: the standard has been formally published, the community is growing and the number of tools is increasing rapidly. Particularly exciting is the new generation of lightweight, specialized tools that do not come from the classic MBSE world but are still based on SysML v2. This fresh competition is good for the market, as it brings new ideas for collaboration, simulation and model-driven automation.

The downside: compliance is challenging. Many tools are not yet fully developed and suitable for practical use. If you want to work productively with SysML v2, you only have a very limited choice at the moment. (My pitch: I can help with this selection.)

Text notation has generated a huge amount of excitement: it lowers barriers to entry, simplifies data exchange, facilitates automation and fits in perfectly with modern engineering workflows. In 2025, several books have been published, the first universities have switched courses to text notation and compact „cheat sheets“ help with day-to-day work. The learning effect is noticeable: many teams report that they develop a common understanding of terms more quickly with text notation than with traditional diagram collections.

Automotive in the West is deep in crisis

2025 was a difficult year for the German automotive industry. Sales markets remained under pressure, while international competition intensified. The speed of Chinese manufacturers in particular put established companies under noticeable stress. BYD, Nio, Xiaomi and other players demonstrated once again that development cycles can be massively shortened, even for complex vehicles, if the organization, software stack and supply chain are consistently designed for speed.

At the same time, German manufacturers are not even managing to set a clear direction and stick to it: For example Porsche 2018, over 6 billion euros by 2022 to invest in their electric strategy only to have to to invest over 3 billion, to undo this.

Porsche first invests 6 billion euros in an electric strategy, only to reverse it later for 3 billion.

Many transformation programs in Germany are still progressing more slowly than planned. Legacy issues in IT and development culture are slowing things down, and the costs of electrification are hitting companies in a phase of economic uncertainty. 2025 was also a year in which several manufacturers had to streamline their model ranges. At the same time, new partnerships were formed with tech and AI companies, because without radical digitalization, the gap to international competitors will continue to grow.

And while our faces are long, Xiaomi collects around 200,000 pre-orders for the YU7 within 3 minutes. Xiaomi has only recently started building cars, delivered the first one in April 2024 and has now produced and delivered 500,000 vehicles (end of 2025).

I don't want to say „I said yes“. But I asked back in 2017: Do German cars have a future?

Trends 2026: AI is becoming the norm, things are getting worse for automotive

In 2026, AI will no longer be a special topic, but basic infrastructure. The question will no longer be whether to use AI, but how deeply it is embedded in processes, tools and decisions. This development affects all engineering disciplines, from requirements management to virtual validation. This also means that companies can no longer differentiate themselves with AI. The question is not: „Do you use AI?“, but: „Which use cases do you accelerate with AI?“.

The 3 major German car manufacturers will no longer exist at the end of the decade. At least not in their current form.

Moritz Schularick, President of the Kiel Institute for the World Economy

Economic and technological integration with China is likely to increase. This not only affects supply chains, but also competitive pressure, cooperation and market dynamics. At the same time, the political situation remains fragile. Uncertainties can be expected in 2026, both in Germany and globally, which could influence innovative strength and willingness to invest. For engineering organizations, this means that adaptability will become a core competence. Whether the automotive industry will manage this in time is questionable. We have Underinvested for far too long.

Conclusion: Many construction sites

The decisive factor in 2026 will be whether organizations are prepared to tackle these structural issues: Making value streams visible, shortening decision paths, actively reducing technical debt and integrating AI in a meaningful way. Methods such as MBSE, SysML v2 or modern toolchains will help, but they are no substitute for the necessary organizational interventions.

This is exactly where Product Velocity an. I am fascinated by how few companies have managed to radically accelerate their development organization without sacrificing quality. Xiaomi, SpaceX and a few others show that it is possible to develop physical products at a speed that was previously unthinkable. It is time to systematically process these patterns and make them usable for the rest of the industry.

Looking back on 2025 can be discouraging and the trends for 2026 show that it will be challenging. But those who have the courage to question their own structures now can benefit enormously. With this in mind: let's tackle it.