As #embodiedAI becomes the next #AI frontier, it forces a sobering reality check for #employment in the American #autoindustry. President Donald Trump’s bold vision of reviving the auto industry and bringing back two million manual labor roles must now collide with the reality of stagnant demand for new vehicles, software-defined vehicles that are easier to manufacture, and adaptive robots that can take up many of the tasks involved in said manufacturing.
Just before the holidays, I was asked to keynote an event sponsored by the German American Chamber of Commerce. This article is an updated version of that presentation. It is even more relevant today following CES 2025 and the news streaming out of Europe. The automotive industry, especially the European automotive industry, faces even greater challenges. These challenges are not from technology startups but from more formidable forces. China has become an international competitor, and its market is no longer an opportunity for incumbents. Vehicle sales, including sales of battery electric vehicles, are slowing, leading many companies to miss their financial targets and reconsider previously announced investments relating to electric vehicles. The regulatory environment is becoming more restrictive but also less reliable in terms of long-term goals and guidance for the industry. At the same time, Software-Defined Vehicles and AI require large capital investments at a time when the industry is cutting costs and continues to show an inability to deploy capital in the areas that will matter in the future. Labor is reacting to the automakers’ actions and introducing new work-life balance demands.
The automotive industry’s path to new mobility has been slow and full of challenges, many created by the automakers themselves, that will not disappear in the new year or even the near future. Many of these challenges emerged in the last couple of years, while the impact of others that existed longer was only recently understood and appreciated. Geopolitics, tariffs, new regulations, labor unrest, increasing competition from Chinese automakers, and decreasing sales, including in China, make up the list.
The road to new mobility will not be a straight line. The twists and turns we encounter and will continue to encounter, will come as the result of economics, business models, industrial policy, politics, national security, but also culture. Mobility is impacted by at least three cultures: the automakers’, the dealers’, and the customers’.
Automakers want to capture a larger percentage of their customers’ lifetime value than they do today. To achieve their goal, OEMs must establish direct relationships with their customers, create new customer experiences, capitalize on the capabilities of their Software-Defined Vehicles, and utilize AI to better understand their customers’ behavior so that they can match their needs to the services they offer.