EU AUTOMOTIVE OEMS : The Roadmap to AI Value Capture

Research evidence excerpt

EU AUTOMOTIVE OEMS : The Roadmap to AI Value Capture

EQUITIES

AUTOMOTIVE

EU AUTOMOTIVE OEMS

The Roadmap to AI Value Capture

As the product cycle focus shifts from horsepower to compute power, we map the potential timeline13 MAY 2026

Sector Research Report and savings for EU OEMs from AI integration. The road to full AI native OEMs likely extends into the

Production time: 05:26* (London time)

2040s, and in the long run these could reduce the cost base by c.5%. Premium OEMs are likely best

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positioned to monetise these savings and new features in the mid-term, but we see risk savings

Sam Perry, CFA simply deflate price in the mass market (where EU OEMs remain behind Chinese competition).BNP Paribas London Branch

(+44) 203 430 8656 AI integration likely to be a long roadsam.perry@uk.bnpparibas.com

The timeline for OEMs to reach full AI integration will extend to 2040 (at least) in our view. Workflow

and operational integration should be relatively quick, but AI as a force for labour reduction,

architecture simplification and capital base restructuring will likely take much longer. We estimate

c.50% of AI related savings can be achieved by 2032, with the remaining 50% taking until 2040.

Cost savings could be substantial and accelerate BEV adoption

We estimate AI related cost savings could represent ~5% of the total cost base. These should

predominantly come across Manufacturing, SG&A and Raw Materials. Our analysis suggests the

cost base of BEVs can be reduced by c.30% more than ICE through AI. This should ultimately play

some part in reducing the BEV-ICE cost/margin differential for OEMs over time. However, in the

short to medium term, reducing battery costs and development times will continue to have a much