From Combustion to Code: Six IP Shifts Automotive Leaders Cannot Ignore in 2026

By Khyle Eaton, Senior Manager of IP Analytics, Anaqua

The automotive industry has always rewritten itself in line with evolving technology, and the pace of change has never been quicker. The cars rolling off production lines in 2026 have more in common with connected devices than the vehicles of a decade ago, and the way automakers remain competitive has shifted with them.

Electrification, software-defined vehicles, AI-driven functionality, and a wave of Chinese competition are reshaping how vehicles are designed, built, sold, and serviced. Behind that shift sits a quieter one. Intellectual property (IP) is no longer a defensive line item. It is the asset that decides whether an automaker can differentiate, monetize, and expand into new markets.

There are two crucial points to success. Firstly, IP strategy should serve business outcomes, not the other way around. Secondly, the brands that will succeed in the next decade aren’t the ones with the largest portfolios. They’re the ones with the clearest ones.

Here are six trends I think every automotive IP and innovation leader should be planning for in 2026.

1. Patent Disputes Are Accelerating

The pace of innovation in electric vehicles, AI, and autonomous driving is producing one of the fastest-growing patent surges the industry has ever seen.

Automotive now accounts for 10-15% of global patents, with more than $130 billion in annual R&D feeding the pipeline.

The composition of that pipeline has also changed. Technology companies, such as Qualcomm and Nvidia, as well as the platform players behind connected vehicle technology, are now among the most active filers in vehicle-relevant categories.

Tier 1 suppliers like Bosch, consistently a top 5 global patent filer across all industries, often hold more patents in specific technologies than the OEMs they sell to. Standard Essential Patent and FRAND disputes around 5G and V2X are multiplying.

Non-Practicing Entities are increasingly targeting electric vehicles (EV) and autonomous vehicle portfolios. The Nokia vs. Daimler (2019-2021) SEP dispute is a visible recent example and will not be the last.

This has direct implications for IP teams. A freedom-to-operate analysis cannot wait for the end of development. Earlier risk screening, portfolio-wide intelligence, and continuous monitor of competitor filings – particularly out of China, now the world’s #1 patent jurisdiction – are no longer optional. A surprise filing in Düsseldorf or Shenzhen at the wrong moment could result in a six- or seven-figure problem.

2. The Map Has Been Redrawn. Protect IP Where Cars Are Sold, Not Just Where They Are Made

3D printing and other advanced manufacturing technologies have made replication faster, cheaper and harder to trace. A design that took a competitor a year to reverse-engineer in 2010 can now be replicated in weeks.

This changes the geography of IP protection. The old model (file heavily in the manufacturing hub, lighter elsewhere) left gaps. Toyota leads the way as the world’s most patent-active automaker – maintaining patents in more than 100 countries. Chinese automakers are filing defensively in Europe and the United States ahead of market entry. Additionally, China has increased its automotive production by 297% since 2004. Every sales market is a market where IP protection matters.

The practical question for 2026 is whether the portfolio matches the sales footprint, country by country. If it doesn’t, a fast-moving competitor can exploit the gap.

3. EV Incentive Volatility Is Now a Portfolio Consideration

Globally, EV sales grew 35% in 2023 to reach 14 million units. That momentum has continued, with The United States reporting that EV sales rose 15% year-on-year in Q1 last year. While the direction of travel is clear, the policy that underpins it is not. The U.S. federal government has rolled back EV incentives, including eliminating the $7,500 federal tax credit on EV purchases.

Europe is holding to its 2035 ICE ban, while Japan continues to favour hybrids. That volatility complicates things for the innovation leader trying to decide where to invest. Electrification, battery development, next-generation charging, hybrid strategy: each is a multi-year R&D bet, made under conditions where policy can flip rapidly.

The IP portfolio is part of the answer. Forecasting costs and workloads across scenarios (high EV electrification, battery development, next-generation charging technologies etc…) shows innovation leaders the implications of each path before they commit capital.

4. Cars Are Now Software and IP Strategy Has to Match

Vehicle value is shifting from hardware to software. Tesla’s Full Self-Driving (FSD) neural networks, Mercedes’ MB.OS, and Volkswagen’s CARIAD work: the operating system is now a competitive asset on par with the engine. Tesla’s 2014 « open source » pledge sits alongside its aggressive filing on its 4680 battery and AI models. Software, machine-learning models, and trade secrets need a different protection model than mechanical patents.

Code, machine learning models, training data, over-the-air (OTA) update infrastructure and vehicle-generated data each behave differently from a mechanical patent. Some are patentable, while others are better protected as trade secrets. Some fall into a grey zone with copyright and licensing. All of them need to be tracked, classified, and protected with the same rigor that IP teams have applied to mechanical filings for decades.

A related shift is underway in the in-vehicle software stack. Several automakers are moving away from Android Auto and Apple CarPlay, instead building proprietary operating systems and user experiences. This gives them more control over data, customer relationships and monetisation, but it also pulls OEMs deeper into areas of software development and ecosystem ownership they haven’t traditionally handled. This brings both opportunity and risk: more room to differentiate through software, but also a growing need to protect and manage IP in areas that weren’t part of their core business before.

Most corporate IP leaders I speak with cannot easily answer the following questions: Which software assets are protected, by which mechanism, in which jurisdictions and under what licensing terms. Currently, most teams only have partial answers to those questions today, and those questions need answering in full quickly.

5. Regulation Is Now an IP Variable

The EU Data Act, and U.S. government prohibitions on certain Chinese and Russian hardware and software. The UN’s R155 cybersecurity regulations for connected vehicles. All of these indicate a tightening set of data privacy rules across major markets. Together, these are redrawing the legal boundary of connected vehicles.

The data a vehicle generates, the cybersecurity layer it ships with, its components sources and the target market it can sell into are downstream of regulation now, as is the IP strategy that surrounds them.

This requires IP teams to continuously have the ability to track regulatory impact, supply-chain exposure, and jurisdiction-specific requirements against a live portfolio, rather than in a quarterly review. The teams that can identify where their regulatory risk is concentrated and understand their IP exposure in a single view, will be a step ahead of those that cannot.

6. Licensing And Collaboration Are Growth Levers

Modern vehicle technology is too complex for one OEM to own in full. The industry has stopped pretending otherwise, and as a result, cross-licensing, joint development agreements, patent pools and partnerships are the operating model now.

The Avanci platform (50+ patent owners pooled for connected vehicle licensing at roughly $20 per vehicle for 4G) is one of the most visible examples, but the pattern runs broader. Examples can also be seen in the Mercedes/Nvidia partnership boundary on autonomous driving IP, BMW’s history of challenging SEP licensing terms, and The Hyundai Group bringing Boston Dynamics and Supernal under one IP roof. Each adds to the licensing surface area.

For IP teams this is good news, with caveats. When done well, licensing becomes a real revenue line and a real defensible advantage. If done badly, it becomes a stack of agreements no-one can find when a dispute arrives. In 2026, the differentiator is portfolio-level clarity: Which assets are licensable? To whom? under what terms? And with what exposure?

 

What This Means For 2026 and Beyond

The automotive industry faces an IP landscape that is higher in volume, more diverse in asset types and more global than at any point in its history. This landscape is also subject to heavier regulation and sharper competitive pressure.

The automakers who win the next few years will have the clearest, most usable picture of what they own, where they own it, what is exposed, and what is worth more outside their four walls than inside. That is the main priority for 2026 and should be the primary focus for every automotive IP leader for the remainder of the year and beyond.

 

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