Stateof theIndustryAutomotiveIEM
AutomotiveContentsExecutivesummaryMarketandMacro trendstechnologytrendsKeychallenges andopportunities,ytechnologies and theirimpactSelectindustry keyperformanceindicators,StrategicimperativesProduct and service innovation IEfficient and productive operation,RegulatorycomplianceStrategicflexibilityTransformational technologies,Hybrid cloud by designSecurebydesignDATa1iIAutomationTraditionalandgenerativeAlAgenticAJQuantumcomputingCasestudiesHondaMitsubishiMotorsPhilipines Corporatin,NoboTechnologiesScuderiaFerrariSmartEurope-YanfengAutoAdditionalinformationAbout the IBMInstitute for BusinessValueIBM Institute for Business Value selected studiesNotes and sourcesIBMIBMInstituteforBusinessValue20251BMCorporation
AutomotiveFxecutivesummaryThe automotive industry facesits most fundamental restructuring in decades. Global economicturbulence and shifting trade dynamics are forcing supply chain overhauls and resourcereallocation. But the real transtormation comes trom sottware-detined vehicles (SDVs)electrification and Al-powered services that are rewriting competitive rules entirely.The stakes are massive. Over half of future revenue will ome from technology-driven services,by 2035 not traditional manufacturing. Thisisn'tevolution. It's acomolete businessmodelrevolution.Successdemandsoperational reinvention.strategicoartnershios. andleadershio boldenoughto reimagine theentire industrv plavbook. Technologvenables transformation.Bold leadershinElectric andSoftware-driven productssottware-detined vehiclesmodels are being testedreauire digital-tirst aren'tjustneworoducts.across customer andorganizationsandThey're entirely new;product lifecycles toecosystems.Culture,operatingmodels. Core,supplier networks. andprocesses that worked forClear winners haven't;productivity metricsmustemerged yet.all be completelydecades are beingrewritten completely.reimagined.urveyrespondeneeIBM1BMInstituteforBusinessValue2025IBMCorporation
AutomotiveMarket&technology trends.IBMInstituteforBusinessValue
MacrotrendsConverging forces pressure automotive toTechnologvadvancements1Economicfactors5Sustainability'?75%ofindustry executives sayBy2035,82% of new cars areSoftware-defined vehicles willrevolutionize driver andpassengerSofivare-defined experienceswllberglobaltrade,forcingOEMs torethinkprojected to beelectrified. Currentexperiences.production strategies entirely.poicies fallshortof 2050 net-zero,AutomakersarenearlytriplingR&DConsumers willexpectexceptionalShareholderpressureisdrvingSDV/andgoals.investmentsinsoftware-definedelectrificationinitiatives, whileDespite political headwinds,products,jumpingfrom21% today toemergingplayersdisruptwithsustainability remains a long-termimmersive entertainment, and58%bv2035predictive diagnostics.competitive pricing models.priority forgovernmentsandautomakers alike.740.65%In 2025, supply chain leaders cite82%of automotive executivessay vehiclesofautomotive executives say customersglobal trade tensions astheirof new cars are expected towill be software-defined andwillexopect autonomous dfriving features2nd biggestchallengesAI-poweredby2035...
