The transformation currently being witnessed in the automotive industry is deep and potent, largely influenced by technology changing consumer behavior and regulations. The current work investigates the competitive environment of this sector, focusing on market dynamics using the Hotelling's Model between the Peugeot E-2008 & Volkswagen ID.3. The thesis commences with an exhaustive automotive market study introducing how it is structured and what the main players involved are. Subsequently, the most important trends that are reshaping the industry such as electrification, connectivity of vehicles, and autonomous driving are analyzed. The analysis will also include the perspective of governments and regulatory agencies, emphasizing how stringent policies put significant pressure on automakers, shaping their strategic decisions and accelerating the transition towards sustainable mobility.