The status of automotive electronic applications worldwide is briefly reviewed, and the common motivating factors as well as future trends are discussed. In order to realize the full potential of electronics on the automobile, a number of issues must be successfully addressed in the 1980’s. Eight issues are identified and discussed in this paper: The cost of electronic systems; the reliability of systems, semi-conductors and other parts; service of complex electronic systems; the proliferation of electronic hardware and software; electro-magnetic interference; centralized versus discrete modules; the fine line between an appropriate level of design evolution and pushing the state of the art too far; the need for a systems engineering approach although considerable work remains to be done on each of these eight issues, none of them appears to be insurmountable; and in fact, the eighth challenge, application of systems engineering concepts promises to be significantly beneficial in resolving the other seven problem areas.