European Automotive and Mobility Industries Accelerate Adoption of AI, Robotics, and Digitalization
The European automotive and mobility sectors are undergoing a profound transformation driven by evolving regulations, shifting customer expectations, and the urgent need for sustainability. According to a new research report published by Information Services Group (ISG), a global AI-centered technology research and advisory firm, enterprises in the region are increasingly turning to artificial intelligence (AI), robotics, and other advanced technologies to lower costs, enhance product quality, and meet the demands of a rapidly changing industry.
The 2025 ISG Provider Lens® Automotive and Mobility Services and Solutions report for Europe highlights that the regional automotive industry is at a pivotal moment, navigating stringent EU climate targets, sustainability mandates, and the growing influence of digitalization. To address these challenges, companies are leveraging technologies such as the Internet of Things (IoT), AI, and robotics to enable real-time monitoring, predictive maintenance, and more flexible production lines.
“European automotive enterprises are rapidly adopting digitalization and sustainability practices across all aspects of their operations,” said Andreas Fahr, partner and manufacturing industry lead for ISG in EMEA. “These strategic initiatives are essential for navigating technological shifts and meeting evolving customer expectations.”
Sustainability and Digitalization Drive Transformation
As the European Union intensifies its focus on climate action, automakers are under pressure to align with ambitious programs like the FitFor55 initiative, which mandates stricter emissions standards and incentivizes the production of low- and zero-emission vehicles. In response, manufacturers are prioritizing cleaner vehicle designs and exploring innovative solutions to reduce environmental impact throughout the product lifecycle.
To mitigate risks associated with global supply chains, companies are localizing battery production, securing access to critical raw materials, and investing heavily in the development of autonomous and connected vehicle platforms. These efforts aim to reduce dependence on imports while ensuring compliance with EU directives aimed at making mobility more sustainable and maintaining Europe’s technological leadership.
The value proposition of modern vehicles is increasingly tied to their digital capabilities. Consumers now expect personalized, data-driven services, leading automakers to integrate advanced digital platforms into their offerings. This shift has given rise to flexible mobility solutions such as car-sharing, subscription services, and ride-hailing, particularly in urban areas where traditional vehicle ownership is less practical and environmental concerns are more pronounced.
Lifecycle Sustainability and Resource Optimization
Environmental considerations are no longer limited to reducing tailpipe emissions. European automakers are also addressing the long-term impact of electric vehicles (EVs) by adopting strategies such as battery recycling and second-life applications. These approaches tackle resource scarcity and waste management challenges, ensuring that sustainable practices extend beyond manufacturing to encompass the entire product lifecycle.
“The European automotive and mobility sector is embracing lifecycle sustainability practices in product design,” said Harish B, manager and principal analyst at ISG Provider Lens, and lead author of the report. “This approach not only mitigates environmental impact but also addresses resource challenges, ensuring efficient utilization of materials and energy.”
By integrating these practices, companies are positioning themselves to meet regulatory requirements while appealing to environmentally conscious consumers. Initiatives like France’s Crit’Air program, which encourages the adoption of lower-emission vehicles, further reinforce the importance of sustainable innovation in the industry.
Data Connectivity and Skills Development
Another key trend highlighted in the report is the growing emphasis on data connectivity. Modern vehicles are increasingly becoming digital platforms, generating vast amounts of data that can be leveraged to improve performance, enhance user experiences, and create new revenue streams. Automakers are investing in robust data analytics capabilities to unlock the full potential of this transformation.
At the same time, there is a surge in investments in skills development as companies seek to equip their workforce with the expertise needed to navigate the complexities of digitalization and automation. This focus on upskilling ensures that enterprises remain competitive in an era defined by rapid technological advancements.
Leaders in Automotive Innovation
The report evaluates the capabilities of 41 service providers across five key quadrants:
- Automotive Engineering and Manufacturing Services
- Electric Vehicles and Mobility Services
- Autonomous Systems and Software-defined Vehicles
- Automotive Retail and Aftermarket Services
- Technology Transformation and Consulting
Several companies stand out as leaders in multiple quadrants, reflecting their comprehensive expertise and ability to drive innovation in the industry. Accenture, Capgemini, Cognizant, HCLTech, IBM, Infosys, TCS, and Wipro are recognized as Leaders in all five quadrants. Other notable mentions include:
- Akkodis and Tech Mahindra, named Leaders in four quadrants each.
- KPIT, LTTS, PwC, and T-Systems, recognized as Leaders in three quadrants.
- Deloitte, DXC Technology, EY, and Tata Elxsi, identified as Leaders in two quadrants.
Additionally, Aptiv, LTIMindtree, and UST are named Leaders in one quadrant each. The report also identifies CI&T, Cyient, Genpact, and UST as Rising Stars—companies with promising portfolios and high future potential.
About ISG Provider Lens® Research
The ISG Provider Lens® Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG’s global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG’s enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Canada, Mexico, Brazil, the U.K., France, Benelux, Germany, Switzerland, the Nordics, Australia and Singapore/Malaysia, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
About ISG
ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data, in-depth knowledge of provider ecosystems, and the expertise of its 1,600 professionals worldwide working together to help clients maximize the value of their technology investments.
