Automotive CIOs must drive business model reinvention—not just IT transformation

The automotive industry is at war with its legacy. Electrification, connectivity, autonomy, sustainability, and customer expectations necessitate total reinvention. This isn’t about digitizing yesterday’s business but inventing tomorrow’s operating model. CIOs who cling to IT as a support function will be left behind. The role must evolve into a more strategic one: business model architect, transformation leader, and ecosystem orchestrator.

CIOs must navigate five systemic shocks

Automotive leaders face five macro forces (see Exhibit 1) that are not only reshaping their product strategies but upending how they operate, monetize, and compete. These forces encompass:

• Electrification and decarbonization
• Software-defined vehicle architecture
• Hyper-personalized digital experiences
• Resilient, data-driven manufacturing
• Geopolitical and regulatory shifts

These are not trends but existential shifts. Technology is no longer a toolset—it’s now the core of every growth, compliance, and efficiency strategy. The CIO’s agenda must match that scale of ambition.

Exhibit 1: The five forces reshaping automotive IT strategy and execution

Source: HFS Research, 2025

Automotive CIOs must follow a roadmap of five mandates to lead reinvention

1. Re-architect the digital core to drive innovation and growth

CIOs must redefine the automotive landscape by embedding digital capabilities across every function—from R&D to post-sale services. Their agenda should be focused on adopting digital thread strategies that seamlessly connect processes end-to-end, driving continuous value creation, revenue growth, and resilience. A critical part of this journey involves modernizing legacy systems with cloud-native, API-first, and modular architectures that ensure agility, scalability, and adaptability in a dynamic market. Central to this transformation is turning underutilized data into strategic assets through unified platforms that enable real-time decision-making, new business models, and monetizable services. Volkswagen’s partnership with AWS to create the Industrial Cloud, integrating data from over 120 factories, illustrates this vision—enhancing production, logistics, and supply chain processes through AI-driven insights and predictive analytics, while increasing efficiency and scaling innovation.

2. Engineer the digital backbone for secure, software-defined vehicles

CIOs should drive the shift toward software-defined, electrified vehicles by building the digital infrastructure for real-time battery diagnostics, OTA updates, telematics, and charging ecosystems. This evolution transforms vehicles into platforms for recurring revenue through subscriptions and data services, moving from hardware to software experiences as a competitive advantage. As these connected vehicles become mobile data centers, CIOs should also lead cybersecurity efforts, implementing zero-trust architectures, regulatory compliance, and real-time resilience across IT, OT, and embedded systems. Tesla exemplifies this approach by pioneering OTA updates and investing in robust cybersecurity practices, reinforcing its software-driven mobility and customer experience leadership.

3. Unify smart manufacturing and ecosystem innovation for scalable mobility solutions

CIOs must reshape smart manufacturing by unifying IT and OT into a seamless operational model powered by IoT, AI, and cloud-based MES systems. This integration drives real-time manufacturing intelligence, boosting overall equipment effectiveness (OEE), reducing downtime, and enabling predictive maintenance and energy optimization. Beyond internal efficiencies, CIOs should foster broader ecosystem collaboration with tech vendors, startups, and consortia to accelerate R&D, go-to-market strategies, and scalable business models.

BMW exemplifies this approach through SAP S/4HANA for global manufacturing standardization and the Microsoft partnership for the Open Manufacturing Platform, advancing Industry 4.0 innovation and supply chain resilience.

4. Elevate customer engagement and talent to power sustainable digital transformation

CIOs should redefine automotive customer engagement by delivering real-time, omnichannel, and personalized journeys that extend across the entire ownership lifecycle. This creates new revenue streams beyond vehicle sales, driven by integrated CDPs, CRM systems, AI personalization, and secure identity frameworks, critical for gaining a competitive advantage. Sustaining this transformation requires a future-ready workforce. In partnership with CHROs, CIOs embed digital skills, agile methods, and continuous learning into the organization, building expertise in AI, cloud, and cybersecurity. Together, enhanced customer experiences and strong talent pipelines drive lasting digital reinvention.

Ford’s FordPass is a digital platform offering services such as remote vehicle management, scheduling maintenance, and locating charging stations. This D2C initiative enhances customer engagement beyond vehicle sales. The company also invests in workforce upskilling through its Ford Technical Training Center, focused on digital, software, and electrification skills, to ensure its talent is future-ready.

5. Embedding sustainability into the digital core of automotive operations

Sustainability is no longer just a checkbox on an ESG report—it’s a strategic imperative that must be deeply embedded within the digital architecture of automotive enterprises. For CIOs, this means integrating sustainability objectives directly into operational processes, data models, and technology platforms. It’s about designing systems that not only track environmental metrics but actively drive carbon reduction, energy efficiency, and the adoption of circular economy principles across the value chain. This includes real-time tracking of carbon footprints, monitoring energy consumption in manufacturing and IT operations, and ensuring responsible sourcing and recyclability of materials.

Volvo Cars integrates sustainability goals across its digital operations, leveraging data platforms to track CO2 emissions across the supply chain. The company commits to becoming a fully electric car maker by 2030 and achieving climate-neutral manufacturing by 2025. Digital systems help it track material sourcing, ensure battery traceability, and optimize resource utilization, embedding ESG deeply into its operational fabric.

The Bottom Line: Don’t just compete-lead; industrialize your platforms or risk irrelevance. CIOs who don’t step up as business leaders in this era of change will see their organizations left behind.

The automotive industry is transforming fast—with electric vehicles, autonomous driving, connected ecosystem, and sustainability demand shaping the landscape. CIOs must be at the forefront of reinventing platforms, redefining engagement models, and reshaping how value is created and captured.

CIOs must lead this reinvention by championing innovation across supply chains, operations, and customer experiences. This means harnessing data for making smarter decisions, driving agility in production, and enabling seamless global collaboration. Those who embrace this new role will turn disruption into dominance. This requires more than a budget; it demands trust, board-level visibility, and a seat at the decision-making table. CIOs must be the architects of a new mobility economy that is digital, customer-centric, ecosystem-enabled, and sustainability-driven. Anything less is a liability.