The EU’s new InvestAI fund will inject €200 billion ($208.4bn) into AI, transforming European automotive manufacturing. With AI gigafactories and smart factory technology, this initiative aims to drive automation, digitalisation and next-generation production systems.
The European Commission has announced the launch of a large initiative to accelerate artificial intelligence adoption in key industries, including automotive manufacturing. With €200 billion ($208.4bn) mobilised through the InvestAI programme, Europe is set to establish AI gigafactories that could completely reshape vehicle production, automation, and digitalisation across the sector.
AI-driven automation has long been a critical force in the evolution of manufacturing, particularly in the automotive industry. The introduction of large-scale AI infrastructure signals a decisive step in integrating artificial intelligence into core production systems.
”Smart factory systems, robotics and automation will benefit from deeper integration of AI, leading to reduced downtime, better resource allocation and enhanced predictive analytics”
With four AI gigafactories planned, these facilities will serve as open, collaborative hubs for training next-generation AI models that can refine manufacturing processes across assembly, robotics, machining, logistics and beyond.
Ursula von der Leyen, President of the European Commission, underscored the significance of the initiative, stating: “AI will improve our healthcare, spur our research and innovation and boost our competitiveness. We want AI to be a force for good and for growth. We are doing this through our own European approach – based on openness, cooperation and excellent talent. But our approach still needs to be supercharged.
“This is why, together with our Member States and with our partners, we will mobilise unprecedented capital through InvestAI for European AI gigafactories.
”This unique public-private partnership, akin to a CERN for AI, will enable all our scientists and companies – not just the biggest - to develop the most advanced very large models needed to make Europe an AI continent.”
Automotive manufacturing to benefit from AI gigafactories
The implications for automotive production are substantial. AI-driven automation is already enhancing assembly lines through many aspects of vehicle manufacturing, from machine learning-based quality control and predictive maintenance, to projects concerned with data-driven sustainability. With gigafactories dedicated to training AI models tailored for industrial applications, automakers are expected to see major transformative advances across many key areas, such as production efficiency, digital twin technology, virtual production networks, and factory automation, to name a few.
As these AI models become more sophisticated, they will play a crucial role in streamlining functions across the automotive production value chain, from material procurement and press shop operations to paintshop precision and powertrain assembly. Smart factory systems, robotics and automation will benefit from deeper integration of AI, leading to reduced downtime, better resource allocation and enhanced predictive analytics.
Nadia Calviño, President of the European Investment Bank, reinforced the role of AI in boosting industrial productivity: “Together with the EU Commission, the EIB Group is stepping up support for Artificial Intelligence, a key driver of innovation and productivity in Europe.”
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European automotive production digitalisation, smart factories and automation
A central aspect of InvestAI is its ability to drive smart factory adoption, where AI and digitalisation converge to create self-optimising production environments. AI gigafactories will provide European automotive manufacturers with access to advanced computational power, enabling real-time data analysis for decision-making on the production floor.
This could lead to advancements in automated quality inspection, reducing defects and enhancing traceability across supply chains. In logistics, AI-powered systems could optimise inventory management, reducing bottlenecks and waste while improving just-in-time manufacturing efficiency. AI models could also enhance 3D printing applications (additive manufacturing) for rapid prototyping and lightweight vehicle components.
Henna Virkkunen, Executive Vice-President for Tech Sovereignty, Security and Democracy, highlighted the broader industrial impact: “Today is a historical day – we have set the foundation for our future AI gigafactories. By putting together our resources, we will enable AI entrepreneurs to innovate and scale up in the most demanding fields of AI. We will be ready to lead the way on AI with state-of-the-art infrastructure.”
Strategic funding to secure AI leadership in European automotive
The EU’s funding strategy involves a layered investment structure, de-risking private sector participation through public financing from programmes such as Digital Europe Programme, Horizon Europe, and InvestEU. Member States will also contribute, reinforcing the continent’s commitment to technological leadership.
”With AI inevitably set to reshape manufacturing workflows, automotive plants will experience a rapid evolution in automation, digital manufacturing and sustainability”
By combining grants and equity investment, the AI gigafactories are expected to catalyse further private funding. This model aligns with the Competitiveness Compass, which prioritises strategic technologies to bolster Europe’s industrial base. Given the critical role AI plays in mobility, manufacturing and supply chains, these investments are likely to define the competitive edge of European automotive production in the coming years.
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With AI inevitably set to reshape manufacturing workflows, automotive plants will experience a rapid evolution in automation, digital manufacturing and sustainability. AI-powered energy management in smart factories, for instance, could improve resource efficiency, aligning with industry-wide goals of carbon neutrality.
Once AI gigafactories begin operations, European automotive manufacturers must prepare for a potential paradigm shift in production, and embrace AI-driven automation to stay ahead of global competition.
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