Author: Vasuki Kashyap

The automotive industry is in the midst of a technological revolution, fueled by Artificial Intelligence (AI) and automation. These technologies are not only changing how vehicles are designed, manufactured, and driven; they’re fundamentally reshaping the entire mobility ecosystem. From the rise of self-driving cars to the emergence of smart factories, AI and automation are driving the future of transportation.

Across the globe, the automotive sector is experiencing an era of unparalleled innovation. Autonomous Vehicles (AVs) are rapidly transitioning from science fiction to reality. Industry giants like Tesla, Waymo, and Cruise are leading this charge, developing sophisticated AI-powered systems that enable cars to navigate complex real-world environments, in the subcontinent Indian auto players like TATA’s, Mahindra’s and others are not far behind in this game, they are working with a sharp focus on the ever growing demand from the aspirational young auto buyer in India, while keeping an eye on meeting global demand with improved design and safety standards. Market research firm McKinsey predicts the autonomous vehicle market will reach a staggering $400 billion by 2030, highlighting the immense potential of this technology.

Furthermore, AI is revolutionizing manufacturing processes, with robotic automation and predictive maintenance significantly reducing costs and boosting efficiency. An example of the practical applications of these technologies is a leading luxury car maker’s usage of AI-powered robots in its factories for precise welding and painting.

The rise of connected cars is another significant development. By 2025, it’s estimated that 70% of new vehicles will be connected to the internet, unlocking a range of features such as real-time traffic updates, remote diagnostics, and over-the-air software updates. AI is also enhancing the in-car experience, with voice assistants becoming increasingly integrated into modern vehicles.

India is the world’s fourth-largest automotive market and is strategically embracing AI and automation to maintain its competitive edge. The Indian automotive sector is a vital contributor to the national economy, accounting for 7.1% of the GDP and employing over 37 million people. Faced with growing demand for smarter and more sustainable vehicles, the industry is increasingly turning to technology for innovative solutions.

Electric Vehicles (EVs): India’s ambitious goal of 30% EV penetration by 2030 relies on the seamless integration of AI. Indian major manufacturers, like Tata Motors and Mahindra, are applying AI to crucial functions such as battery management, energy efficiency, and predictive maintenance. For example, Tata’s Nexon EV uses AI to optimize battery performance and extend its driving range.

Autonomous Driving: While fully autonomous vehicles are still in the testing phase, Indian startups such as Minus Zero, Swaayatt Robots are developing cutting-edge AI-driven solutions for self-driving technology. The Indian government is also quite active, with autonomous vehicle trials on designated highways and investment in the development of 5G connectivity to support Vehicle-to-Everything (V2X) communication.

Smart Manufacturing: Indian automobile manufacturers are embracing automation at a fast pace to improve productivity and efficiency. Maruti Suzuki, the leading player in the Indian market, uses robots in its factories for welding and assembly. Predictive maintenance powered by AI is also reducing downtime and improving operational performance.

Shared Mobility: AI is revolutionizing India’s fast-growing shared mobility sector. Companies such as Ola and Uber are using AI to optimize routes, reduce waiting times, and enhance passenger safety. For instance, Ola’s AI-powered platform analyzes traffic patterns and driver behavior to enhance the overall ride experience.

While the automotive sector has the potential to gain significantly from AI and automation, there are plenty of challenges on the way. In India, the principal barriers to a widespread adoption will be the cost of technology, infrastructure, and skill gaps. Globally, data privacy, cybersecurity, and the ethics of AI usage are major issues. For example, determining liability in the event of an accident involving an autonomous vehicle requires careful consideration and water-tight regulatory frameworks.

Despite these challenges, the opportunities presented by AI and automation are compelling. These technologies have the potential to significantly reduce accidents, lower emissions, and create new, high-skilled jobs in tech-driven sectors. In India, government initiatives like the FAME-II scheme (Faster Adoption and Manufacturing of Hybrid and Electric Vehicles) and the Smart Cities Mission are accelerating the adoption of these transformative technologies.

The fusion of AI and automation with the automotive industry is not a fleeting trend—it is a paradigm shift that is redefining mobility. Globally, it is driving innovation and sustainability. In India, it is laying the foundation for a smarter, cleaner, and more connected transportation ecosystem. As we navigate this transformative journey, collaboration between governments, industry leaders, and academia will be crucial to unlocking the full potential of these technologies.

The wheels of change are already in motion, and the road ahead is brimming with promise. By embracing this revolution, we are not just reimagining mobility—we are driving towards a future that is safer, greener, and more inclusive for all. The AI revolution on wheels is here, and it’s accelerating faster than ever.

At MeitY nasscom Centre of Excellence for AI we are well positioned as enablers, we spot the early trends and understand the needs of the industry at large and make the right connects with startup solutions and enterprises for co-creation and co-innovation, resulting in industries embracing innovative solution at a much accelerated pace and reducing their time on R&D with the power of co-creation, at MeitY nasscom CoE for AI, we have enabled many enterprises across sectors as the guiding force of digital transformation making an impact globally.