AI Investment in the Automotive Industry: Who Will Survive the Drop?
AI investment in the automotive industry is set to plunge, according to new research by Gartner. While over 95% of automakers today are heavily investing in artificial intelligence, only 5% are expected to maintain that pace by 2029. This sharp drop raises serious concerns about whether the current excitement around AI will lead to long-term gains. The report suggests that only a few carmakers, particularly those with strong software expertise and visionary leadership, will be able to keep up the momentum and gain a competitive edge.
Legacy Carmakers Face Steep Challenges
Traditional automakers like Volkswagen are struggling to keep pace with tech-driven rivals such as Tesla and BYD. While known for strong engineering, legacy brands often lack deep software capabilities. Many are trying to evolve, but internal resistance and outdated thinking are major roadblocks.
According to Gartner analyst Pedro Pacheco, success in AI demands a digital-first mindset. That means removing organizational barriers and ensuring software leaders have direct access to top decision-makers. Without this shift, companies will continue to fall behind.
“A company that is not great at software is inevitably going to struggle,” Pacheco told Reuters. The automotive industry must rethink its approach, placing technology and innovation at the center of strategic decisions. Otherwise, the gap between AI leaders and laggards will only widen.
