Only five percent of carmakers will sustain heavy AI investments by the end of the decade as most fail to meet amibitous goals.
Research biz Gartner forecasts that most automotive companies will abandon AI initiatives within five years due to unrealistic expectations about quick returns – without recognizing the extensive training and development required for all but basic applications.
“The automotive sector is currently experiencing a period of AI euphoria, where many companies want to achieve disruptive value even before building strong AI foundations,” said Gartner VP Analyst Pedro Pacheco.
“This euphoria will eventually turn into disappointment as these organizations are not able to achieve the ambitious goals they set for AI,” he added.
This pattern won’t surprise Reg readers, as we have previously reported that just 5 percent of organizations have successfully integrated AI tools into production processes at scale, with 95 percent of enterprises seeing zero return from their AI investment.
Gartner’s assessment covers all AI applications – not just autonomous driving – including in-car systems that learn individual driver preferences and adapt vehicle behavior and settings accordingly.
Companies with robust software foundations, tech-savvy leadership, and a long-term AI focus will pull ahead, creating a competitive divide – assuming buyers actually want AI in their cars.
While this might suggest an advantage for tech-focused companies like Tesla over traditional automakers, Tesla’s European sales have declined this year amid competition from Chinese rivals like BYD.
Pacheco notes that companies with software and data experience have a natural head start, especially when led by execs that prioritize AI over traditional concerns of automotive makers.
The Reg asked Google AI Search what the traditional priorities of an automotive company are, and it told us these are manufacturing efficiency and cost control, product quality and reliability, plus safety.
Gartner also believes that at least one car firm will achieve fully automated vehicle assembly by 2030.
“The race toward full automation is accelerating, with nearly half of the world’s top automakers already piloting advanced robotics in their factories,” said Gartner VP Analyst, Marco Sandrone.
Full automation could reduce labor costs and shorten production cycle times, potentially lowering prices for buyers. But what of the workers?
While it may lessen the need for human labor in vehicle assembly, new roles in AI oversight, robotics maintenance, and software development could offset losses if reskilling programs are prioritized, Sandrone says. ®
