Gartner recently released its 2025 Digital Automaker Index, revealing that legacy automakers such as Renault, Jaguar Land Rover, and Ford continue to fall behind in software capabilities, struggling to catch up with “digital native” brands such as Tesla, Nio, and Xiaomi. Gartner refers to automakers with leading software strength as “new incumbents.” These companies improved their combined score across eight software-focused criteria from 60.6% in 2024 to 61.6% in 2025. In contrast, the score for traditional automakers fell to 33.8% this year, down from 34.1% last year.

As the global automotive industry faces the dual challenges of electrification and pricing pressure, two major automakers—General Motors (GM) from the U.S. and Hyundai from South Korea—have announced an expanded partnership. Together, they will co-develop five new vehicle models, covering both internal combustion engine (ICE) vehicles and electric vehicles (EVs). The collaboration will also extend to shared resources in the supply chain and manufacturing processes, aiming to directly compete with the rising wave of new Chinese automakers in global markets.

For over a century, automakers have handled product quality issues reactively—problems are discovered by consumers, reported by dealers, and then addressed through recalls or repairs by the manufacturers. This approach is not only time-consuming but also costly. Now, with the rise of Software-Defined Vehicles (SDVs) and the increasing availability of vehicle data, the automotive industry is ushering in a new era of quality management driven by artificial intelligence (AI).

Over the past two years, China has witnessed an intense price war in the electric vehicle (EV) market, driven by both emerging EV startups and traditional automakers. This phenomenon, often referred to as “involution,” may have boosted short-term sales but has also led to plummeting profit margins and bloated inventories across the industry. In response, China’s State Council has officially announced plans to rectify what it calls “irrational competition” within the EV sector, vowing to strengthen cost investigations and enhance price monitoring. Could this mark the end of involution and restore order to China’s automotive market?

This week, Ford Motor Co. announced the layoff of approximately 350 employees from its North American connected vehicle software team, accounting for about 5% of the department’s workforce. This decision highlights the challenges faced by automakers at a critical juncture in the transition to the Software-Defined Vehicle (SDV) era. Even though connected functions and digital experiences have become the core battlegrounds for product development and brand transformation, car manufacturers continue to face multiple hurdles, including talent integration, resource allocation, and adjustments to technical architecture.

As electric vehicles and smart cabins become the main battlefield of the automotive industry, BMW has announced a collaboration with Alibaba Group to launch a new car model in the mainland China market that integrates AI cockpit technology. This is not only a cross-industry partnership but also a significant strategic shift for European automakers attempting to "localize in China" in the software competition. Mainland China has long transformed from the world's largest automobile consumption market into a testbed for technological innovation. Local brands such as BYD, XPeng, Zeekr, and NIO are not only gaining ground in electrification but are also capturing consumer attention through software features like OTA updates, intelligent assistants, voice control, and AI navigation. Although traditional European automakers still enjoy strong brand recognition, they seem to be gradually losing their voice in the smart technology competition.

This month, General Motors (GM) officially appointed Barak Turovsky as the company’s first-ever Chief AI Officer. This move not only underscores GM’s strategic positioning in the field of artificial intelligence but also marks a pivotal moment in the automotive industry’s transition to electrification and intelligent technology. It signals a new phase in the AI competition within the automotive sector, where AI applications are now considered a primary strategic trend.