Only a handful of automotive companies are likely to sustain ambitious artificial intelligence (AI) investment in the coming years, a study released on Monday shows, raising doubts over whether industry “euphoria” will deliver lasting benefits.
By 2029, only 5% of carmakers will maintain strong AI investment growth, down from more than 95% today, technology research firm Gartner said in its report on 2026 predictions for the sector.
The study found only carmakers with strong software foundations, tech-savvy leadership and “a consistent very long-term focus on AI” are expected to pull ahead, potentially deepening a competitive AI divide.
Volkswagen and other legacy manufacturers, long known for engineering rather than software skills, are battling to catch up with new tech-driven rivals such as Tesla and BYD.
Many legacy carmakers are trying, but internal obstacles and outdated mindsets hold them back, Gartner analyst Pedro Pacheco told Reuters.
Success requires companies to become “digital-first” organisations, eliminating internal obstacles and prioritising technology at the highest levels, including direct reporting lines of software leaders to CEOs, Pacheco said.
“A company that is not great at software is inevitably going to struggle,” he said.
