The Future of Mobility: How Automakers Are Harnessing AI to Stay Competitiv

Published Date : 12/09/2025 

Volkswagen, General Motors, Stellantis, BMW, and Tesla are making significant investments in artificial intelligence to transform vehicle development, manufacturing, and customer experience. Discover how these automakers are leveraging AI to stay ahead in the competitive automotive industry. 

The automotive industry is undergoing a profound transformation, with artificial intelligence (AI) emerging as a key driver of innovation and efficiency. German automaker Volkswagen (VWAGY) has made a bold move by pledging up to €1 billion ($1.18 billion) by 2030 to integrate AI into various aspects of its operations, from vehicle development to manufacturing and cybersecurity. The company aims to save up to €4 billion by 2035 through smarter processes, signaling a significant shift in the industry.

This push comes at a critical moment for Volkswagen. The company is facing increasing competition in China and pressure to cut costs in Europe, highlighting the need for more efficient and innovative practices. By investing in AI, Volkswagen aims to accelerate innovation cycles and enhance operational efficiency. AI is expected to transform every layer of the business, from design and simulation to cybersecurity and vehicle testing.

AI is already reshaping the way people interact with vehicles, from in-car voice assistants to predictive maintenance and over-the-air updates. Automakers are quickly moving to integrate these technologies into everyday driving. While not all automakers are publicly disclosing their AI investments, their strategic alliances with leading AI firms reveal their deep commitments to this technology.

General Motors (GM) is deepening its AI capabilities through a partnership with NVIDIA (NVDA). GM has been using NVIDIA GPUs to simulate and validate advanced driving systems. The two companies are collaborating on a wide range of projects, from AI model training to in-vehicle hardware. General Motors is using the NVIDIA Omniverse platform to build digital twins of assembly lines. These virtual environments allow GM to test and refine manufacturing processes before implementing them in the real world, reducing downtime and costs. Additionally, GM will deploy NVIDIA DRIVE AGX in future vehicles for advanced driver-assistance systems and enhanced in-cabin safety features.

Italian-American automaker Stellantis (STLA) is leveraging partnerships with AI specialists to improve both customer-facing and back-end operations. Its collaboration with Mistral AI covers vehicle engineering, manufacturing optimization, and fleet data analysis. The partnership leverages Mistral’s expertise in large language models to accelerate development timelines and boost quality. Stellantis is also working with Mistral AI to build AI-driven assistants that act like conversational manuals for drivers.

BMW, a close peer of Volkswagen, has teamed up with Alibaba to make its Intelligent Personal Assistant (IPA) smarter. They are building a new AI engine together, based on Alibaba’s Yan AI from Banma’s smart cockpit system. This upgraded AI assistant will appear in BMW Neue Klasse cars made in China from 2026, aiming to make the driving experience more intuitive and interactive.

Unlike these legacy automakers, Tesla (TSLA) is positioning itself as more than just a car company. It is pivoting its core focus to AI, autonomous vehicles, and robotics. Tesla’s efforts include Full Self-Driving neural networks, autonomous driving systems, and the Optimus robot project. This approach gives Tesla a head start in innovation and sets it apart from traditional automakers.

AI is no longer a side project for automakers—it’s essential for staying competitive. Companies that integrate AI effectively—whether through in-house innovation like Tesla, big investments like Volkswagen, or smart partnerships like General Motors, BMW, and Stellantis—will gain a lasting advantage in speed, efficiency, and customer experience. For automakers, keeping pace with AI isn’t optional anymore—it will decide who leads the future of mobility. 

Frequently Asked Questions (FAQS): 

Q: What is Volkswagen's AI investment plan?

A: Volkswagen plans to invest up to €1 billion by 2030 in AI to integrate it into vehicle development, manufacturing, IT, and cybersecurity, aiming to save up to €4 billion by 2035.

Q: How is General Motors using AI with NVIDIA?

A: General Motors is using NVIDIA GPUs to simulate and validate advanced driving systems and is collaborating on AI model training and in-vehicle hardware, including the NVIDIA Omniverse platform for digital twins of assembly lines.

Q: What is Stellantis' AI collaboration with Mistral AI?

A: Stellantis is working with Mistral AI to improve vehicle engineering, manufacturing optimization, and fleet data analysis using large language models, and to develop AI-driven assistants for drivers.

Q: How is BMW enhancing its AI assistant with Alibaba?

A: BMW is partnering with Alibaba to build a new AI engine for its Intelligent Personal Assistant (IPA), based on Alibaba’s Yan AI from Banma’s smart cockpit system, to be featured in BMW Neue Klasse cars from 2026.

Q: What is Tesla's approach to AI and robotics?

A: Tesla is focusing on AI, autonomous vehicles, and robotics, including Full Self-Driving neural networks, autonomous driving systems, and the Optimus robot project, positioning itself as a leader in innovation. 

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