Connected Car Innovation Index 2026
Chinese carmakers set the benchmark for the AI era
Chinese carmakers lead the new Connected Car Readiness ranking, according to the 2026 CCI study, with software scalability, AI integration and digital ecosystems becoming key measures.
Zeekr
Connected-car innovation is no longer just about adding new functions. The 2026 CCI study argues that the decisive advantage now lies in scaling software, AI and digital ecosystems quickly – and its new readiness ranking places young Chinese carmakers firmly at the top globally.
The automotive industry is entering a new phase of competition. Connected-car innovation used to be judged largely by visible functions such as displays, infotainment services or driver-assistance features. The key question now is whether manufacturers can develop software-centric and AI-enabled vehicles quickly, improve them continuously and deploy them globally.
That is the focus of the newly introduced Connected Car Readiness (CCR), added to the 2026 Connected Car Innovation study published annually by the Center of Automotive Management (CAM) together with automotiveIT and Cisco Systems. The analysis assesses the technological, organisational and strategic readiness of 20 global carmakers and complements the Connected Car Innovation Index (CCI).
For CAM Director and study lead Prof Stefan Bratzel, this reflects the transition from software-defined to increasingly AI-defined vehicles: “In future, what matters will not be simply who can point to the most innovations today. The successful manufacturers will be those that can master software, data and artificial intelligence over the long term and bring them into their vehicles at high speed.”
What does Connected Car Readiness actually measure?
For the 2026 study, CAM analysed more than 2,500 connectivity-related innovations from the world’s 30 largest carmakers. Of these, 1,894 had already reached production vehicles, while 582 were classified as world firsts. The number of production-ready connected-car innovations has increased by around a quarter compared with the 2016 to 2020 period. Connectivity and infotainment, intelligent interfaces and the still relatively young EV ecosystem category showed particularly strong momentum.
The key finding goes beyond the number of new functions. The CCI measures visible innovation output, whereas Connected Car Readiness examines the structures that make such innovation repeatable. Four areas are assessed: hardware and software readiness for software-centric vehicles, AI integration, the strength of technology ecosystems and partner networks, and company culture and organisation. A total of 56 individual indicators feed into the CCR assessment.
Individual features do not automatically translate into long-term competitiveness. Carmakers need architectures, development processes and organisations that can scale those capabilities across platforms and markets and continue improving them throughout the vehicle lifecycle.
“Many manufacturers already offer interesting connected-car functions,” Bratzel says. “The decisive difference is whether they can scale these capabilities and continue developing them. In the era of the software-defined vehicle, platform competence, AI integration and organisational speed are becoming the real competitive factors.”
Peter Laxy, automotive expert at Cisco Germany, also points to the wider digital environment. “Innovation is increasingly emerging from the interaction between the vehicle, the cloud and digital ecosystems,” he says. “Customer value is being created more and more through continuous software development across the entire vehicle lifecycle. That is only possible with fully connected vehicles.”
Why are Chinese OEMs leading the readiness ranking?
The new CCR ranking points to a structural shift in the industry. XPeng achieves the highest Connected Car Readiness score at 97 per cent, closely followed by Xiaomi. Tesla, Nio, Li Auto, Rivian and the Huawei-influenced HIMA alliance also appear in the leading group. They share a strong software orientation, modern electronics architectures and high organisational agility.
Chinese manufacturers occupy a particularly large share of the leading positions. Many have moved from challenger status to setting the pace in digital vehicle development. Their approach often combines short development cycles with rapid closed-loop iteration and in-house AI development, allowing software and data to feed more directly back into product development.
“Many Chinese manufacturers think of the vehicle as a digital product from the outset,” Bratzel says. “That enables them, for example, to develop AI-based user experiences and bring them to the road much faster than many traditional competitors.”
Among German manufacturers, BMW records the strongest CCR result at 80 per cent. Mercedes-Benz follows at 73 per cent, while Volkswagen reaches 47 per cent and sits in the lower middle of the ranking. The study still sees strong innovation output at Volkswagen, but identifies group complexity as a greater challenge when it comes to scaling modern software platforms.
Where do German carmakers still outperform?
The established Connected Car Innovation Index produces a different picture. German manufacturers remain at the front of the OEM ranking: Volkswagen takes first place, followed by Mercedes-Benz and BMW. The Chinese groups Geely, BYD and SAIC follow behind them.
The breadth of the innovation portfolio is a particular strength. Volkswagen ranks among the leading players in interfaces, connectivity and infotainment, and ADAS. Mercedes-Benz records the highest innovation performance in connectivity functions, while BMW performs particularly strongly in intelligent operating and display concepts.
The contrast between CCI and CCR is revealing. Volkswagen can lead in visible innovation output while scoring considerably lower on the structural ability to scale future software architectures. The challenge is increasingly to build software once and scale it across brands and markets, rather than repeatedly creating functions for individual programmes.
German manufacturers have also increased their share of global connected-car innovation strength after several years of relative decline. Chinese OEMs now account for 40.7 per cent of the global innovation strength measured by the study, while German manufacturers reach 35.4 per cent, narrowing the gap.
“The German manufacturers have noticeably increased their innovation momentum again recently,” Bratzel says. “We are seeing important progress, particularly in the future-oriented areas around vehicle software.”
How is AI changing the competitive equation?
Artificial intelligence is becoming another dividing line between manufacturers. The study reflects the industry’s shift from software-centric vehicles towards AI-defined architectures and evaluates technologies including generative voice assistants, personalised user functions and agentic AI systems capable of performing tasks independently.
Several Chinese OEMs lead in this field alongside BMW, Mercedes-Benz and Tesla. Intelligent voice assistants are emerging as a visible differentiator, while AI increasingly affects vehicle functions, software architectures and the engineering processes used to create them.
Traditional manufacturers are therefore also working to embed AI across engineering, production and software development rather than treating it as a standalone cockpit feature. This makes data structures, computing platforms and governance as relevant to AI readiness as the models themselves.
Why are partner ecosystems becoming critical?
The study also highlights the growing importance of technology partnerships. Very few carmakers can develop all of the required capabilities themselves. Cloud providers, semiconductor companies, mapping specialists and content platforms are becoming increasingly important parts of the vehicle technology stack.
BMW, Tesla and XPeng are particularly well positioned in this area, according to the study. Geely, Volkswagen and Toyota combine significant in-house capabilities with broad partner ecosystems. Orchestrating external technologies without losing control over architecture, data and differentiation is becoming a strategic capability.
That development is also pushing the industry towards open software ecosystems and shared technology foundations, where collaboration can reduce duplicated development effort. Manufacturers still need to decide which layers of software and AI are central to brand differentiation and should remain under their own control.
The Connected Car Innovation Study 2026
The Connected Car Innovation Index is an annual industry study analysing innovation trends and performance among 30 global carmakers across interfaces, connectivity and infotainment, the electric vehicle ecosystem, and ADAS and automated driving.
The new Connected Car Readiness metric assesses the structural prerequisites for developing and scaling competitive software-centric vehicles. It is based on the innovation database of the Center of Automotive Management. The full study provides the methodology, additional CCI and CCR rankings, further analysis and an Executive Summary.
What will determine the next phase of competition?
The 2026 results suggest that competitive positions in the automotive industry are being redistributed. Production expertise, industrial scale and global sales networks remain important, but software capability, AI expertise, partner management and organisational speed are gaining weight.
The data also shows that German manufacturers have maintained, and in some areas strengthened, their innovation performance despite difficult market conditions. Their central task is now to turn that innovation output into software and AI platforms that can remain competitive over multiple vehicle generations and markets.
“The next decade in the automotive industry will not primarily be decided in factories,” Bratzel concludes. “Competition is shifting towards software, AI and digital ecosystems. Those able to sustain speed in those areas will shape the mobility of tomorrow.”
