Gartner warns of AI slowdown & divide among carmakers

Gartner expects that almost all carmakers will slow their spending on artificial intelligence over the next five years, leaving a small group of software-focused manufacturers to set the pace for the industry.

The research firm forecasts that by 2029 only 5% of automakers will maintain strong growth in AI investment. It estimates that more than 95% of carmakers fit that description today.

Gartner links the shift to what it describes as a peak of enthusiasm around AI across the sector. It expects that many projects will fall short of current expectations.

"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 Pedro Pacheco, VP Analyst at Gartner. "This euphoria will eventually turn into disappointment as these organisations are not able to achieve the ambitious goals they set for AI."

The firm predicts that only a handful of automotive groups will keep ambitious AI programmes in place after the next five years. It expects a group of technology-led carmakers to move away from rivals that struggle with software and data.

Gartner says these companies will share three traits. They will have strong software foundations. They will have leaders who understand technology. They will sustain a long-term focus on AI rather than treating it as a short-lived initiative.

"Software and data are the cornerstones of AI," said Pacheco. "Companies with advanced maturity in these areas have a natural head start. In addition, automotive companies led by execs with strong tech know-how are more likely to make AI their top priority instead of sticking to the traditional priorities of an automotive company."

Gartner expects this pattern to create what it calls a competitive AI divide. A small group of carmakers will expand AI use across products and operations. The rest of the industry will limit AI to narrow projects or slow the pace of new deployments.

The forecast comes as global automakers invest in automated driving, connected services, predictive maintenance and digital retail. Many of these projects depend on data platforms and software engineering practices that remain immature in parts of the industry.

Gartner's analysts argue that firms with strong internal software skills will adapt faster than those that rely heavily on external suppliers. They expect that leadership with technical expertise will influence investment choices and timeframes.

Automation milestone

Gartner also forecasts a major shift in vehicle manufacturing over the next decade. It expects that at least one automaker will run a fully automated vehicle assembly line by 2030.

The firm links this outlook to current experiments with robotics on production lines. It notes that many large manufacturers are already testing advanced automation in their factories.

"The race toward full automation is accelerating, with nearly half of the world's top automakers (12 out of 25) already piloting advanced robotics in their factories," said Marco Sandrone, VP Analyst at Gartner. "Automated vehicle assembly helps automakers reduce labor costs, improve quality, and shorten production cycle times. For consumers, this means better vehicles at potentially lower prices."

The prediction covers the full vehicle assembly process. It implies that machines and software will manage tasks that currently require large numbers of workers on the line.

Gartner notes that such a shift will change the mix of jobs in car plants. It expects less direct demand for manual assembly work. It also expects more demand for roles in AI oversight, robotics maintenance and software development.

The firm states that reskilling programmes could offset job losses. It says this outcome depends on decisions by automakers and policymakers over the rest of the decade.

AI and industry roles

Gartner positions itself as a source of analysis for senior executives who are making AI-related decisions. It works with C-level leaders and technology providers on AI strategies and industry trends.

The company says its research and advisory staff include more than 2,500 business and technology experts. It publishes thousands of written pieces and case studies that cover AI use across sectors.

Gartner says its clients use an AI-based tool named AskGartner. They use it when they look for guidance on AI in their organisations.

The company says it will provide further detail on its latest automotive forecasts in a research report on industry trends through 2026.