As electrification, AI, and connected mobility reshape the industry, automakers are being pushed to rethink not just vehicles but their entire business models.

The global automotive industry is entering a defining phase shaped by electrification, software-defined vehicles, AI-driven operations, and supply chain reinvention. On the sidelines of SAP Sapphire 2026, Shipra Sinha, Senior Analyst, Industry Intelligence Group (IIG), CyberMedia Research (CMR), spoke with Nadine Kanja, Global Head of Industry Business Unit Automotive, SAP SE about how automakers are navigating rapid transformation across manufacturing, mobility, sustainability, and customer experience.

The automotive industry has continuously evolved with technology, from combustion engines and assembly lines to connected and electric vehicles. But the transformation underway today is far more complex and far-reaching.

Automakers across the world are simultaneously navigating electrification, software-defined vehicles, AI-driven operations, supply chain disruptions, and sustainability mandates, while also facing competition from a new generation of technology and mobility players.

According to Nadine Kanja, this shift is redefining not just vehicles, but the entire automotive business, from manufacturing and supply chains to customer experience and enterprise operations.

The EV shift is redefining automotive operations

Electrification remains one of the strongest forces driving transformation across the industry, although adoption continues to vary significantly by region.

Markets such as China and parts of Europe are moving faster, while other regions continue to progress at different speeds depending on infrastructure, regulations, and consumer behaviour. Yet regardless of geography, the shift to EVs is creating operational complexity that goes far beyond vehicle production.

Moving from combustion engine manufacturing to EV production requires new manufacturing processes, battery handling systems, supplier ecosystems, and compliance frameworks.

One major example is the European Battery Passport regulation, which will require manufacturers to report nearly 100 data points for batteries above a specified capacity beginning in February 2027. For automakers, this creates a significant challenge around traceability, compliance, and data management.

At the same time, the EV ecosystem is attracting an entirely new generation of players. Battery manufacturers, mobility startups, and technology companies are increasingly becoming part of the automotive value chain, blurring the lines between automotive and technology industries.

Cars are becoming intelligent platforms

Alongside electrification, vehicles themselves are rapidly evolving into connected, software-driven platforms.

Connected vehicles generate massive amounts of real-time data, opening the door to entirely new business models and customer experiences. Autonomous driving, predictive maintenance, subscription services, and personalised mobility features are becoming central to automotive strategy.

This shift is also changing the competitive landscape. Companies that were not traditionally viewed as automakers are emerging as major mobility players through software-first and data-driven business models.

As Nadine Kanja noted, “Every car will be connected till 2030.”

One example is Waymo, an SAP customer that is scaling rapidly as autonomous mobility gains momentum. The company recorded nearly 10 million rides annually last year and is now targeting 10 million rides per month, highlighting the pace at which software-driven mobility platforms are expanding and reshaping the competitive landscape

Consumer expectations are also evolving differently across regions. In China, vehicles are increasingly viewed as digital lifestyle platforms packed with intelligent features and experiences. In Europe, mobility efficiency remains a stronger priority, while autonomous driving capabilities continue to gain traction in the United States.

Why resilience has become as important as efficiency

If electrification is reshaping products, supply chain resilience is reshaping operations.

The disruptions of recent years exposed how vulnerable automotive manufacturing can become when supply chains are interrupted. Semiconductor shortages, geopolitical uncertainty, and logistics disruptions forced automakers to rethink sourcing and production strategies.

Today, resilience has become just as important as efficiency.

According to SAP, supply chain resilience remains one of the top priorities for automotive companies globally, with significant investments flowing into real-time visibility, predictive systems, and intelligent supply chain orchestration.

Industry initiatives such as Catena-X are helping improve transparency across OEMs and suppliers while enabling faster responses to disruptions and operational bottlenecks.

Real-time data integration is becoming critical in helping manufacturers identify risks early, react faster, and maintain production continuity.

AI is becoming the industry’s new operating layer

While electrification and connectivity dominate headlines, AI is emerging as the technology layer connecting the entire automotive ecosystem. Automakers are increasingly deploying AI across sourcing, manufacturing, supply chains, aftersales, and customer engagement.

SAP is already introducing AI agents and assistants across automotive workflows, from sourcing optimization and predictive supply chain alerts to aftermarket planning and manufacturing operations. The objective is to reduce manual effort, improve decision-making, and allow employees to focus on more strategic work.

“AI will transform how we are working within the next five years,” Nadine Kanja said during the discussion.

AI is also beginning to converge with another rapidly emerging area: robotics.

Automotive companies are increasingly expanding into humanoid robotics, reflecting the growing convergence between manufacturing, AI, and automation. For instance, Martur Fompak International is already using humanoid robotics integrated with SAP AI agents within its manufacturing operations. At the same time, major OEMs such as BYD, Hyundai Motor Company, and Honda have announced plans to expand into humanoid robotics, signalling how automotive companies are increasingly looking beyond vehicles toward broader intelligent mobility and automation ecosystems.

India’s automotive industry is accelerating rapidly

India is also emerging as a significant growth market within this global transformation.

SAP is seeing Indian automotive companies accelerate EV development while scaling digital operations at remarkable speed. Alongside established OEMs, new mobility players and startups are entering the ecosystem, creating a highly dynamic market environment.

One example is Mahindra Group, which has significantly modernised its digital infrastructure through its long-standing partnership with SAP. As part of its RISE with SAP journey, Mahindra migrated over 28,000 users to SAP S/4HANA Cloud Private Edition, integrated 45+ third-party systems, and automated 250 business processes using SAP Business Technology Platform solutions. The company also reduced back-order processing times by 20%, saved more than 1,000 IT workdays within nine months through automation, and successfully handled nearly 100,000 SUV bookings within 30 minutes during a major vehicle launch.

For SAP, this reflects a broader shift happening across India’s automotive ecosystem, where companies are investing heavily in cloud, AI, automation, and intelligent manufacturing capabilities to prepare for long-term growth.

Looking ahead, SAP believes the most successful automotive companies will be those that balance electrification, software-driven experiences, AI-powered operations, and resilient supply chains together.

Or as Nadine Kanja described it, the next era of automotive innovation will be defined by “Electrified AI”.

By Shipra Sinha, Senior Analyst, CyberMedia Research (CMR)