AI adoption across automotive value chain to surge as sector grapples with rising competition: PwC

• AI and advanced technology adoption across the automotive value chain to surge – from 47% of companies using them today to 72% in 2030
• Almost half (46%) of automotive executives identify new entrants from adjacent industries, such as technology and energy, as a key source of competition over the next five years
• Almost two-thirds (64%) are pursuing ecosystem participation as technology re-shapes the mobility experience – rising to 80% among the top 20% of 'future-fit' automotives
• Battery electric vehicles are expected to grow from 18% to 30% of production volume over the next five years – while traditional internal combustion engine (ICE) share is expected to fall from 60% to 41%
• Respondents expect 33% of revenue to come from new customers within five years – such as commercial fleet operators, mobility service providers, and governments

LONDON, Sept. 24, 2026 /PRNewswire/ -- The use of AI and other advanced technologies across the automotive value chain is expected to surge over the next five years, with the proportion of companies using them rising from 47% today to 72% in 2030, according to PwC's inaugural Global Automotive Outlook, launched today.

At the same time, more than half (51%) see AI as one of the most important technologies for achieving their strategic goals, more than the two-fifths (41%) who cite battery and electric powertrains. More than one-third (39%) cite in-vehicle software connectivity.

This growing focus on technology – across manufacturing, R&D, supply chains, sales and corporate functions – comes as rising competition, new customer bases and electrification in the sector re-shapes consumer expectations and as digital-first, software-enabled vehicles become core to the mobility experience.

Harald Wimmer, Global Automotive Leader, PwC Germany, said:

"The vehicle is no longer defined by the steel that leaves the factory – it is increasingly being defined by software, digital services and data analytics. As the sector faces increased competition and technology re-shapes the mobility experience, automotive makers must be putting their digital strategies front-and-centre if they are to unlock growth."

Almost half (46%) view entrants from adjacent industries – especially technology and energy – as a key source of competition over the next five years.

But the research finds a significant divide in how companies are positioned to respond: four-fifths (80%) of 'future-fit' automotives identified in PwC's analysis report a high tolerance for strategic risk-taking, compared with less than half (49%) of other companies.

'Future-fit' companies show greater appetite for strategic risk and growth

As automotive companies face increased competitive pressure, almost two-thirds (64%) are pursuing ecosystem participation – the most frequently cited strategic move.

Among the top 20% of 'future-fit' companies identified in PwC's research, this rises to 80%.

Much of that ecosystem focus will be around technology. Automotive companies expect technology companies to displace industrial manufacturers as their most important collaborators over the next five years. The proportion of original equipment manufacturers (OEMs) rating autonomous driving and advanced driver assistance systems (ADAS) as a top-three revenue source rises from 9% today to 24% in 2030.

'Future-fit' automotive companies are also more likely to report highly developed software engineering and AI capabilities (71% vs. 45%), to be expanding into new customer segments (86% vs. 71%), to have a high tolerance for strategic risk-taking (80% vs. 49%), and to be expanding into offerings beyond automotive (72% vs. 45%).

Yet the findings point to a tension between investing for today's returns and funding tomorrow's growth. While 76% of companies say they allocate capital to the highest-return initiatives, 73% say their manufacturing and operations investments are primarily aimed at productivity and efficiency. Just 12% say those investments are primarily aimed at growth and increasing market share.

Capability gaps add to the challenge. Half (51%) cite talent shortages and 45% cite current workforce skills among the biggest barriers to creating, delivering and capturing value, while AI and software engineering are among the capabilities respondents identify as most critical.

Electric vehicle production to swell as new growth markets emerge

Electric vehicle production is expected to swell – with battery electric vehicles (BEV) expected to grow from an average of 18% of production volume to 30% within five years. Traditional internal combustion engines (ICE) are projected to fall from 60% to 41%.

In China, the shift is far sharper – battery electric vehicles (BEVs) are expected to rise to 40% (up from 29%), while ICE falls to 29% (from 43%).

As the consumer landscape shifts, geography is also rapidly transforming where automotive companies are projected to see the most growth.

Less than one-third (26%) cite Western Europe as a top three growth market over the next five years (down from 44% today), while South Asia and Southeast Asia are projected to see the greatest growth – rising from 24% to 45%, and 31% to 44%, respectively.

At the same time, the traditional consumer is shifting. Respondents expect 33% of revenue to come from new customers within five years – such as commercial fleet operators, mobility service providers, and governments – up from 21% today.

Future-proofing automotive companies for the mobility age

For automotive companies to future-proof their businesses for the mobility age, the report suggests they should:

1. Reframe the strategic question from sector to domain – companies that continue to define themselves as vehicle manufacturers will be left behind.
2. Become active participants in ecosystems – being embedded in an ecosystem is the fastest way to leverage cross-sector insight and expertise.
3. Shift capital allocation logic from returns to options – 'future-fit' companies fund specific bets whose ROI is not yet visible while incumbents must build the new business while winding down the old.
4. Think more like a technology company – automotives must look beyond the core product to the wider mobility experience.

Harald Wimmer, Global Automotive Leader, PwC Germany, concluded:

"Automotive executives understand the disruption underway – from software to AI to energy – but their ability to act decisively is constrained by governance rooted in legacy priorities. To succeed, automakers must evolve their governance to balance capital discipline with the agility and strategic options needed to fund the next wave of innovation."

Notes to Editors

About PwC's 2026 Global Automotive Outlook
PwC's Global Automotive Outlook is based on a survey of 720 automotive executives across 33 countries and territories, with detailed analysis on China, Germany, India, Japan, and the United States. Conducted in Spring 2026, the research explores the challenges and opportunities facing the industry now and over the next five years, charting the capabilities and strategies that will make players 'future-fit' for the future. The survey identifies three distinct archetypes shaping the sector – inward-looking industrialists, growth-orientated diversifiers and product-focused digitisers, each with their own strengths and weaknesses. You can learn more about the archetypes and takeaways at www.pwc.com. 

About PwC 
At PwC, we help clients build trust and reinvent so they can turn complexity into competitive advantage. We're a tech-forward, people-empowered network with more than 360,000 people in 130+ countries and territories. Across audit and assurance, tax and legal, deals and consulting, we help clients build, accelerate, and sustain momentum. Find out more at www.pwc.com.