How AI is reshaping the auto

industry: A look at 15
high-momentum
technologies across the
automotive value chain
We highlight emerging tech markets across automotive R&D,
manufacturing, sales, vehicle use, and the aftermarket.
April 2024

Automotive firms are grappling with several disruptive forces.

A major one is that the shift toward a fully electric, software-defined vehicle is driving
R&D and production costs higher while demanding more agility and flexibility from
automakers. The growing adoption of new vehicle form factors will also change how
vehicles are sold, used, and maintained, requiring new financing models and repair
processes.

Meanwhile, the proliferation of online car-buying and more sophisticated e-commerce

technology across other retail verticals has pressured automotive dealerships to invest
in an increasingly digital experience to meet car buyer expectations.

In response to these trends, an emerging set of companies is leveraging large language

models (LLMs) and AI more broadly to build a new set of tools and capabilities across
the automotive value chain, from AI copilots used in manufacturing, sales, and servicing,
to microfactories for production and automated vehicle inspection in the aftermarket.

These solutions hold substantial potential to help automotive players drive growth,
improve visibility, and reduce costs across their lines of business.

In this report, we use CB Insights data to identify 15 high-momentum technology

markets across the automotive value chain. We focus on solutions that are seeing
positive sentiment from investors at earlier deployment stages, but which we expect to
have a notable impact within the next 5-10 years. Our analysis factors in funding,
analyst briefings, business relationships, headcount growth, Mosaic scores, and more.

This report was created using the help of CBI’s Instant Insights tool. Customers can
generate scouting reports, analyze funding patterns, and dig deeper into business
relationships for each of the companies mentioned in this report using this tool.

How AI is reshaping the auto industry | 2

Contents
Key takeaways 4

R&D 4
Generative design 4
Quantum computing for chemical & material simulation 5
3D printing 6

Production & assembly 7

Discrete manufacturing analytics platforms 7
Industrial humanoid robots 7
Manufacturing AI copilots 8
Microfactories 9

Sales & distribution 9

Automotive digital engagement platforms 9
Electric vehicle financing platforms 10

Vehicle use 10
Software-defined vehicle (SDV) platforms 11
Automotive cybersecurity 11
Fleet maintenance platforms 12

Aftermarket 12
Automotive aftermarket copilots 13
Automated vehicle inspection 13
Digital vehicle maintenance & repair 13

Looking ahead 14

Tech startups across the auto value chain 14

How AI is reshaping the auto industry | 3

Key takeaways
1. AI and quantum computing are accelerating vehicle development and reducing
R&D costs, allowing OEMs to introduce new designs, prototypes, and materials.

2. Automotive production will see gains from more sophisticated robotics and
automation solutions, laying the groundwork for cost-effective, modular
production of next-generation vehicles.

3. AI is enabling a more personalized, efficient automotive sales process, with new

fintech solutions and engagement tools speeding up the sales cycle and
improving accessibility for car buyers.

4. Connected vehicle technology is enabling real-time visibility into vehicle health

and security, providing OEMs with valuable data to enhance other facets of the
auto value chain and the in-vehicle experience.

5. Chatbots and computer vision-led inspection solutions are driving efficiencies

in vehicle repair, improving service desk productivity and technician accuracy.

R&D
AI and quantum computing are accelerating vehicle development and reducing R&D
costs

The shift toward a fully electric, autonomous, and connected vehicle is requiring
automakers to invest substantially in R&D.

Concurrently, automakers are working to meet aggressive sustainability goals, adding

challenges like reducing emissions and waste during production.

In response, many OEMs are experimenting with tech-enabled solutions to speed up

development and prototyping, while also lowering costs.

Generative design

Design tools are integrating generative AI capabilities to accelerate product validation.

How AI is reshaping the auto industry | 4

Using generative design tools, engineers can set parameters for an end product, such as
an automotive component made of certain materials that should also be lightweight
and highly efficient. The generative design software will run simulations, generating a
range of outputs and then deciding which works best.

Monolith, for example, is developing a solution that allows engineers to input their
design goals with parameters around component performance, materials,
manufacturing methods, and cost constraints. Monolith’s solution then explores all
possible combinations of these parameters, ultimately suggesting an optimal design.

The company is already working with leading automakers such as BMW, Honda, and
Mercedes-Benz on applications like improving vehicle acoustics and speeding up EV
battery development.

Quantum computing for chemical & material simulation

Quantum computers process information in a fundamentally different way than

conventional computers. This opens up new types of algorithms that show promise for
applications like training machine learning models, discovering materials, and solving
complex optimization problems involving lots of variables. As the tech matures,
quantum computers will allow engineers to run simulations faster and with greater
accuracy.

For example, Terra Quantum is developing quantum solutions to support automotive

players with discovering new materials and building better batteries. The early-stage
startup has raised $86M in total funding and has grown its headcount 3x over the past 2
years.

How AI is reshaping the auto industry | 5

Terra is also working with Volkswagen Group’s Data Lab on other applications of
quantum computing in automotive development, such as improving AI training for
vehicle image recognition systems.

3D printing

Advances in AI are improving 3D printing for automotive R&D.

For example, metal additive manufacturing firm 1000 Kelvin, which raised $3M in seed
funding in November 2023, is developing an AI copilot for 3D printing. This tool is
intended to predict issues and perform corrections in real time, reducing the number of
printing attempts needed during development and enabling more complex parts to be
made that would otherwise require time-consuming design iterations.

How AI is reshaping the auto industry | 6

Production & assembly
Automotive production will see gains from more sophisticated robotics and
automation solutions

The rise of generative AI has had an impact across the production process, including
helping humanoid robots learn complex tasks more quickly and powering
manufacturing copilots. AI is also enhancing existing technologies such as
manufacturing analytics platforms and factory floor automation solutions.

Discrete manufacturing analytics platforms

Industrial IoT platforms for discrete manufacturing capture and assess data from
systems and machines and then use this data to identify ways to make the
manufacturing process more efficient.

Companies in this space are developing tools to help OEMs and Tier 1 suppliers lower
energy use, reduce water consumption, improve yield, and predict equipment failures.

Platforms like Tulip and Cognite combine LLMs with these datasets to expedite
workflows.

Industrial humanoid robots

Factory robots have been central to automating the manufacturing process for a long
time, but in recent months, humanoid robots have captured the attention of investors,
automakers, and big tech firms. These robots resemble the human body in form and are
typically designed to handle a broader range of tasks — including those still currently
handled by humans — than traditional robot form factors.

Humanoid robots have also been given a boost from the use of LLMs to facilitate more
effective human-robot interactions.

Growth-stage humanoid robotics players have closed large investments in 2024, with
Figure raising $675M in Series B funding in February and competitor 1X raising $100M
in Series B funding in January.

BMW recently announced a collaboration with Figure to begin testing its

general-purpose humanoid robot in auto manufacturing environments. Mercedes-Benz

How AI is reshaping the auto industry | 7

partnered with Apptronik to deploy its humanoid robot, Apollo, on the assembly line.
Meanwhile, Tesla is working on its own humanoid form factor, which it plans to use for
vehicle production and assembly in its manufacturing facilities.

Dig into how players in the industrial humanoid robots market stack up using the CB
Insights ESP ranking tool.

Manufacturing AI copilots

Generative AI has fueled the emergence of manufacturing AI copilots, which work

alongside human operators to analyze large datasets and provide real-time suggestions
for process improvements.

For instance, manufacturing optimization platform Retrocausal’s copilot monitors the

workflow of automotive production workers. The company claims it is capable of
catching 80% of worker mistakes, cutting down line-stopping events by half and
reducing the time needed for onboarding.

How AI is reshaping the auto industry | 8

Microfactories

Some automakers are exploring the use of microfactories, which operate as small,
modular, and highly automated manufacturing cells that are designed to replace the
traditional assembly line.

Microfactories are intended to make production more customizable and adaptable

without requiring big equipment overhauls — potentially offering new models for
manufacturing at smaller scales.

SAEKI Robotics, which raised $2M in seed funding in August 2023, offers a
robotics-as-a-service model for customers to book cells to produce large components,
allowing automakers to bypass the cost of retooling their machines.

Sales & distribution

AI is enabling a more personalized, transparent automotive sales process

Automotive retail has seen several transformational shifts over the last few years.

As the pandemic spurred traditional dealers to adopt digital selling and e-commerce
enablement tools, digital dealerships such as Vroom and Shift rode the wave to go
public — but have since floundered due to profitability issues.

Tesla’s direct-to-consumer (D2C) sales model has also influenced other automakers to
reconsider conventional dealership distribution and adopt a more tech-forward
approach to vehicle sales, though the transition has been slow.

Given the challenges associated with a large-scale shift to online sales or a D2C model,
auto dealers have been exploring a number of technologies that are easier to deploy in
the near term.

Automotive digital engagement platforms

Digital engagement firms such as Orbee and Impel are developing copilots for
automotive sales teams. These solutions aim to accelerate the sales process by
leveraging customer data to deliver personalized marketing and customer
communication.

How AI is reshaping the auto industry | 9

Companies in the space are already partnering with automotive retailers. Impel, for one,
is working with auto dealership solutions provider CDK Global, which plans to integrate
Impel’s conversational AI platform into its existing customer experience solution.

Electric vehicle financing platforms

As automakers increasingly move electric, companies such as EV Life and Tenet are
designing fintech products for EV financing. These help users access loans that take
into account EV tax credits, rebates, and home charger installation costs.

These solutions streamline the financing process for dealerships and customers,
making it easier to assess customer creditworthiness, compare multiple financing
options, and complete transactions efficiently. EV financing firms are also leveraging
solutions like predictive lending to improve their offerings, as highlighted by digging into
EV financing business relationships using CBI’s AI-powered Business Relationship
Insights tool.

Vehicle use
Connected vehicle technology is enabling real-time visibility into vehicle health and
security

With the rise of vehicle connectivity, several tech-enabled solutions are emerging to
enhance vehicle functionality and safety on the road.

How AI is reshaping the auto industry | 10

When connected, vehicles on the road are generating datasets that are valuable to
stakeholders across the value chain, including OEMs, Tier 1 suppliers, and automotive
retailers. Vehicle diagnostics data, for example, can help inform OEMs and suppliers for
product development purposes, while also enabling predictive maintenance for auto
dealerships and service centers — allowing for more proactive vehicle repair and better
customer service.

Software-defined vehicle (SDV) platforms

Software-defined vehicle platforms allow vehicles to be controlled, managed, and

updated through software rather than just dedicated hardware components. This
enables OEMs to deliver updates and new features (like upgraded automated driving
features) to cars over-the-air (OTA) — meaning wirelessly and often without the user
actually needing to initiate the update. This provides OEMs and other stakeholders with
more control during the vehicle use process, while also setting the foundation for other
connectivity services that help generate valuable data for OEMs.

Sonatus, which is backed by Kia and has partnered with Hyundai, recently unveiled its
Software-Defined Component product that allows OEMs and suppliers to monitor, test,
and optimize various parts of the car as it's being used. The company has raised $110M
across multiple Series A rounds.

Automotive cybersecurity

Automotive cybersecurity technology is central to securing the emerging class of

software-defined vehicles. Notably, a number of emerging players such as Israel-based
C2A Security are starting to leverage generative AI to automate security controls and
prioritize responses to vulnerabilities.

C2A is already partnering with Tier 1 suppliers and vendors, deploying tools to secure
connected vehicle software and EV ecosystems including charging stations — as can be
gleaned using the CB Insights’ Business Relationship Insights tool to analyze its
partnerships.

How AI is reshaping the auto industry | 11

Fleet maintenance platforms

Fleet maintenance platforms, which help fleet managers track and optimize their fleets
in real time, are also offering solutions for OEMs, as the vehicle diagnostics data they
capture can help OEMs develop more targeted products and services.

Companies in the space such as Compredict and CerebrumX are tracking everything
from EV battery health to tire and brake wear to engine issues, ultimately generating
valuable insights for OEMs on vehicle health and performance.

Vehicle diagnostics are becoming more relevant for OEMs as they focus on new vehicle
prototypes and prioritize sustainability.

Aftermarket
Chatbots and computer vision-led inspection solutions are driving efficiencies in
vehicle repair

Auto dealers and repair shops are facing a number of headwinds, from downward
pressure on vehicle prices to a shortage of skilled technicians. In response, startups are
developing solutions that automate tasks across the entire auto servicing process, from
automated vehicle inspection to digital repair to AI chatbots.

How AI is reshaping the auto industry | 12

Automotive aftermarket copilots

One area that has gained investor interest in recent months is genAI-powered chatbots
and copilots for automotive service desks. Companies in the space raised a collective
$118M across 3 deals in 2023, hitting a new high.

Companies such as Impel and Numa are designing chatbots specifically for auto
dealership service centers. These bots will allow dealers to engage with more
customers and improve the customer experience for vehicle maintenance.

Numa claims that integrating its chatbot can expedite customer approvals on repair
orders by 5x and boost customer satisfaction scores by 16%, as highlighted by CBI
Instant Insights on its partnership with dealership software provider CDK Global.

Automated vehicle inspection

Automated vehicle inspection, which leverages computer vision to detect issues that
may be missed by the human eye, helps auto repair shops reduce errors while also
mitigating the current labor shortage. The tech has implications not just for auto
dealerships but also for insurance companies handling claims.

Mid-stage startup Ravin AI, for one, is developing mobile apps that can help consumers,
auto retailers, and fleet operators more effectively and affordably assess damage.

Digital vehicle maintenance & repair

As vehicles grow increasingly connected and autonomous, maintenance and repair will
also need to cover vehicle software and sensors.

How AI is reshaping the auto industry | 13

As a result, a number of companies are leveraging the power of AI, IoT, and robotics to
support more complex vehicles with solutions such as sensor calibration and digital
programming. For example, Kinetic Automation is building technology to automate and
support advanced driver assistance system (ADAS) calibrations.

These technologies will become more important as vehicles with increasingly complex
capabilities need repairs.

Looking ahead
Though the auto industry — and the industrial sector more broadly — has historically
been slower to adopt new technology, current advances in AI are fueling a new set of
solutions that are quick to adopt and fast to have an impact.

Startups leveraging the power of generative AI will see sustained investor interest and
industry adoption, and automakers should explore ways to automate functions across
the value chain with chatbots and AI-led data analytics tools.

As AI grows more sophisticated, it will also help to reduce the costs of more
capital-intensive solutions, such as humanoid robots, microfactories, and automated
vehicle inspection systems, suggesting that these technologies will offer stronger return
on investment in the years to come.

Tech startups across the auto value chain

Latest Latest Latest
Funding Funding Funding
Value chain Market Company Mosaic Round Date Amount Country

R&D 3D printing Quantica 650 Series A April 2023 $15.3M Germany

November
R&D 3D printing 1000 Kelvin 500 Seed $3.0M Germany
2023

R&D 3D printing Aim3D 270 Seed VC - II July 2023 Germany

How AI is reshaping the auto industry | 14

 AMAREA November
R&D 3D printing 320 Seed Germany
Technology 2023

Generative Incubator / United

R&D Monolith 600 July 2022
design Accelerator Kingdom

Generative
R&D Diabatix 460 Belgium
design

Quantum
computing for Incubator /
R&D chemical & BosonQ Psi 510 Accelerator - June 2023 India
material IV
simulation

Quantum
computing for
United
R&D chemical & QC Ware 590 Grant - III April 2022 $1.5M
States
material
simulation

Quantum
computing for
Terra February
R&D chemical & 690 Series B Switzerland
Quantum 2023
material
simulation

Quantum
computing for
OTI October
R&D chemical & 610 Series B $55.0M Canada
Lumionics 2022
material
simulation

Discrete
Production August United
manufacturing Tulip 680 Series C $100.0M
& assembly 2021 States
analytics

Discrete
Production
manufacturing Cognite 730 Series B May 2021 $150.0M Norway
& assembly
analytics

Discrete
Production December
manufacturing MakinaRocks 640 Series B $12.7M South Korea
& assembly 2022
analytics

How AI is reshaping the auto industry | 15

 Discrete
Production November
manufacturing Braincube 730 Series B $91.2M France
& assembly 2023
analytics

Industrial
Production February United
humanoid Figure 900 Series B $675.0M
& assembly 2024 States
robots

Industrial
Production January
humanoid 1X 880 Series B $100.0M Norway
& assembly 2024
robots

Industrial
Production Corporate February United
humanoid Apptronik 700
& assembly Minority 2023 States
robots

Industrial
Production Agility August United
humanoid 800 Unattributed $0.6M
& assembly Robotics 2023 States
robots

Production Manufacturing November United

Retrocausal 640 Seed VC - II $5.3M
& assembly AI copilots 2023 States

Production Manufacturing September United

Invisible AI 470 Series A $15.0M
& assembly AI copilots 2022 States

Production Manufacturing
Spread 540 Series A May 2023 $16.7M Germany
& assembly AI copilots

Production SAEKI August

Microfactories 570 Seed VC $2.3M Switzerland
& assembly Robotics 2023

Production February United

Microfactories Molg 530 Seed $0.1M
& assembly 2022 States

Automotive
Sales & digital September United
Orbee 710 Series A $10.3M
distribution engagement 2023 States
platforms

Automotive
Sales & digital January United
Impel 690 Growth Equity $104.0M
distribution engagement 2023 States
platforms

How AI is reshaping the auto industry | 16

 Automotive
Sales & digital November United
Fullpath 660 Series C $40.0M
distribution engagement 2022 States
platforms

Electric vehicle
Sales & November United
financing Tenet 800 Debt $20.0M
distribution 2023 States
platforms

Electric vehicle
Sales & October United
financing EV Life 520 Pre-Seed
distribution 2023 States
platforms

Electric vehicle
Sales & Spring Free January United
financing 640 Series A - II $4.6M
distribution EV 2024 States
platforms

Automotive
Vehicle use C2A Security 640 Series A - III June 2023 $1.3M Israel
cybersecurity

Automotive Incubator /
Vehicle use Upstream 750 May 2023 Israel
cybersecurity Accelerator - II

Automotive December United

Vehicle use Privacy4Cars 520 Series A - II
cybersecurity 2022 States

Fleet
Corporate United
Vehicle use maintenance CerebrumX 570 June 2023
Minority - II States
platforms

Fleet
Incubator /
Vehicle use maintenance Compredict 380 June 2023 Germany
Accelerator - V
platforms

Fleet
Corporate January United
Vehicle use maintenance Viaduct 490
Minority 2024 States
platforms

Software-
defined vehicle September United
Vehicle use Sonatus 710 Series A - III
(SDV) 2023 States
platforms

How AI is reshaping the auto industry | 17

 Software-
defined vehicle Unattributed November United
Vehicle use sibros 680
(SDV) VC 2022 States
platforms

Software-
defined vehicle November
Vehicle use Veecle 540 Seed VC $2.9M Germany
(SDV) 2023
platforms

Software-
defined vehicle
Vehicle use Aurora Labs 660 Series C July 2022 $63.0M Israel
(SDV)
platforms

Automotive
September United
Aftermarket aftermarket Orbee 710 Series A $10.3M
2023 States
chatbots

Automotive
January United
Aftermarket aftermarket Impel 690 Growth Equity $104.0M
2023 States
chatbots

Automotive
Incubator / January United
Aftermarket aftermarket Numa 310
Accelerator 2020 States
chatbots

Automotive
Convertible United
Aftermarket aftermarket STELLA 640 May 2023 $4.0M
Note States
chatbots

Automated
March
Aftermarket vehicle Click-Ins 620 Series A $7.5M Israel
2023
inspection

Automated
Corporate November United
Aftermarket vehicle Landing AI 650
Minority - II 2023 States
inspection

Automated
United
Aftermarket vehicle Ravin AI 720 Series E July 2023 $65.0M
Kingdom
inspection

How AI is reshaping the auto industry | 18

 Digital vehicle
Kinetic October United
Aftermarket maintenance & 690 Series A $10.0M
Automation 2023 States
repair

Digital vehicle
March United
Aftermarket maintenance & Revv 530 Seed VC - II $2.1M
2023 States
repair

How AI is reshaping the auto industry | 19