AI Driving the Future of Mobility

At IAA Mobility 2025 in Munich, topics such as “Software-Defined Vehicle Platforms” and 5G corridors are shaping the debates. At the same time, the EU is discussing digital competitiveness in its Strategic Dialogue on the Automotive Industry – a clear signal of how closely the automotive and Internet industries are converging. At the heart of this transformation is artificial intelligence (AI), which is driving automation across vehicles, services, and infrastructure. In this article, I explore why digital infrastructure, data spaces, AI, and cybersecurity are crucial, and what politics and businesses can do now.

AI and automation: beyond the vehicle

AI not only enables automated driving functions; it also accelerates the entire lifecycle of mobility, from over-the-air (OTA) updates to predictive maintenance and secure workshop processes.

From car to digital device

The industry is experiencing the dual transformation of electrification and digitalization. With the Software-Defined Vehicle (SDV), value creation is shifting from hardware to software, data, and services. OTA updates expand functions after purchase, and vehicles are becoming part of digital ecosystems. For users, this means more comfort and safety; for manufacturers, it means new revenue streams. According to S&P Global Mobility, connected cars generate around 25 gigabytes of data per hour – a potential that can only be harnessed with powerful networks, cloud, data spaces, AI, and cybersecurity.

Networks and connectivity

Reliable networks are a basic prerequisite for SDV. Autonomous driving, real-time updates, and Vehicle-to-Everything (V2X) communication require stable connections. With 5G campus networks and later 6G, their importance will grow further. For the V2X market, forecasts see over 40 percent of compound annual growth rate (CAGR) through 2030, varying by region and definition.

Cloud and data spaces

The cloud processes mass data in real time, controls updates, and manages vehicle fleets. The automotive cloud market is forecast to grow at 14–16 percent CAGR through 2032. At the same time, the EU is strengthening access to vehicle data with the Data Act. Decentralized data spaces such as the Mobility Data Space promote user-oriented services and reduce dependencies.

Interoperability instead of isolated solutions

Incompatible systems are still hampering development. Open standards such as AUTOSAR Adaptive, Eclipse SDV, COVESA, and SOAFEE create compatibility – comparable to app ecosystems for smartphones. Partnerships are driving this development: BMW and Microsoft are building connected car platforms, Bosch is committing €2.5 billion to AI through 2027, and SAP and Siemens are supporting production and mobility with cloud and edge solutions.

AI as the core

Without AI, the SDV would be unthinkable: it enables automated driving, intelligent cockpits, and predictive maintenance. Edge computing brings decisions directly into the vehicle. For the AI market, studies estimate annual growth of 15 percent to 29 percent through 2030, depending on scope and methodology. Europe can achieve independence from hyperscalers with sovereign models on its own data spaces.

Beyond vehicle intelligence, AI also drives automation throughout the automotive ecosystem. Predictive maintenance automates repair scheduling by detecting wear early and notifying workshops before breakdowns occur. OTA updates automate the software lifecycle itself, rolling out new features and security patches without physical intervention.

For example, connected car data already enables predictive maintenance through cloud-based AI analysis. Pilot projects show that diagnostics are becoming more precise and that repair processes are being streamlined – a glimpse of how AI is not just making vehicles smarter, but also transforming how the entire mobility system operates.

Security and trust

As the software load increases, so does the attack surface. Since 2022, new security standards (UNECE, ISO) have been in force: for new vehicle types since July 2022, and for all new vehicles since July 2024. Risk analyses, structured update processes, and end-to-end encryption are mandatory. Transparency through software bills of materials and strategies for post-quantum secure cryptography further strengthen trust. In addition, AI-supported intrusion detection and supply-chain-wide compliance processes are emerging as essential tools to ensure resilience against increasingly complex threats.

Reality check: Hurdles and trade-offs

This transformation, however, is not without hurdles. The shift to zonal E/E architectures, new software platforms, and OTA processes demand high upfront investment and temporarily increases complexity for manufacturers. At the same time, cloud solutions accelerate innovation but risk creating new dependencies – which is why multi-cloud strategies and clear exit clauses are becoming indispensable.

Tensions also emerge between speed and safety in OTA approvals, between monetization and data protection, or between openness and IP protection. On the global stage, Europe faces stiff competition: in the US, Big Tech companies dominate the SDV stack, while China leverages scale and integrated hardware–software ecosystems. Europe’s unique opportunity lies in trust, interoperability, and data sovereignty – but only if it moves quickly enough.

Recommendations for Europe

To secure long-term competitiveness, Europe must turn ambition into measurable action:

• Open interfaces and an EU legal act by 2026
• Governance framework for data spaces, doubling productive datasets by 2028
• 5G coverage on TEN-T corridors up to 90 percent by 2029
• Cross-border pilot projects and sandboxes
• Stronger SME participation in alliances
• Blended financing via CEF (Connecting Europe Facility), IPCEI (Important Project of Common European Interest), and private funds
• Post-quantum roadmap for secure encryption

Software-defined vehicles are central to Europe’s digital competitiveness. They require close cooperation between the automotive and Internet industries. Networks, cloud, data spaces, interoperability, AI and cybersecurity form the foundation – only together can industry and the tech sector make mobility in Europe reliable and scalable. AI, together with infrastructure, data spaces, and cybersecurity, will define whether Europe shapes the SDV future – or follows it.

For a deeper look at the technologies, policy frameworks, and market forecasts shaping this transformation, my full Deep Dive is available as a PDF download [here].

Juan I. Hahn is Founder and Executive Advisor at HAHN Network and leads the Mobility Competence Group at the eco Association. He helps European mobility and industrial companies turn AI and data partnerships into board-ready, scalable business opportunities, from first use cases to rollout, by assembling the right partners for each project. Building on entrepreneurial experience and ecosystem leadership, he develops practical, reusable agentic AI patterns that make software-defined mobility and edge intelligence secure, auditable, and commercially viable.