EU automotive/mobility firms increasingly adopt AI and robotics
According to a report published by Information Services Group (ISG), automotive and mobility enterprises in Europe are increasingly adopting AI and other technologies to reduce costs and enhance product quality amid significant industry changes.
The report finds that the regional automotive industry is at a critical juncture in 2025 as it navigates demands for sustainability and digitalisation driven by EU climate targets and evolving consumer expectations. To address these demands, enterprises are investing in IoT, AI and robotics to enable real-time monitoring and predictive maintenance while making production lines more flexible.
“European automotive enterprises are rapidly adopting digitalisation and sustainability practices in all parts of their business,” said Andreas Fahr, partner and manufacturing industry lead for ISG in EMEA. “These strategic initiatives are critical to navigating technological shifts and evolving customer expectations.”
The report found that enterprises are mitigating global supply chain risks and staying competitive by localising battery production, securing access to critical raw materials, and investing in the development of autonomous and connected vehicle platforms. These initiatives aim to reduce dependence on imports and meet EU sustainability directives.
As the digital capabilities of vehicles become increasingly important, companies are integrating digital platforms and data-driven services to satisfy consumer preferences. Furthermore, the market is changing as car-sharing, subscription services and ride-hailing gain traction. In providing these services, businesses are targeting new revenue streams in urban areas where traditional ownership is impractical and environmental concerns are high.
European automakers continue their efforts to reduce emissions as the EU introduces stricter standards, such as the FitFor55 program, which encourages manufacturers to produce more low- and zero-emission vehicles, the report states. In addition, national environmental initiatives such as France’s Crit’Air program encourage consumers and fleet operators to acquire lower-emission vehicles, subsequently driving manufacturers to prioritise cleaner vehicles.
Companies in the region are also exploring new approaches to minimise the long-term environmental impact of EVs. They are adopting strategies such as battery recycling and second-life applications to address resource scarcity and waste management concerns, ensuring sustainable practices that align with efficient resource utilisation.
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“The European automotive and mobility sector is embracing lifecycle sustainability practices in product design,” said Harish B, manager and principal analyst, ISG Provider Lens, and lead author of the report. “This approach mitigates environmental impact and addresses resource challenges.”
A customised version of the report is available from T-Systems.
The 2025 ISG Provider Lens Automotive and Mobility Services and Solutions report for Europe is available to subscribers or for one-time purchase here.
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