Car industry leaders face disruption from tariffs, tech and talent shortages
Automotive CEOs and executives now report the highest disruption levels of any major industry, with tariffs, supply chain and workforce challenges reshaping boardroom priorities in 2025 and 2026.
Automotive executives now face the sharpest disruption of any major sector, according to the latest AlixPartners Disruption Index. The 2025 and 2026 editions of the survey, which canvassed thousands of senior leaders across global industries, found auto CEOs more anxious about their jobs and strategies than peers in any other field.
The disruption index for automotive reached 76.7 in 2025, up nearly five points from the previous year, reversing earlier signs of stabilisation. This jump pushed the sector ahead of technology, healthcare and financial services in perceived disruption, with the aftermarket, shared mobility and fleet businesses reporting the most pronounced increases. Supply chain, tariffs, technology and workforce pressures now dominate boardroom agendas.
Tariffs and supply chain remain top concerns
Tariffs and protectionist measures have imposed billions in costs, forcing manufacturers to re-evaluate production footprints and inventory planning. The US tariff policy in particular has upended cost structures and trade routes, with retaliatory moves from trading partners creating new barriers. Nearly 70% of auto executives now say they are scaling growth in regions outside China, adjusting strategies in response to US-China tensions. Despite this, most still intend to invest in China, indicating the market’s continued importance even as its risks increase.
Supply chain disruption remains the biggest single challenge for OEMs and suppliers. A third of surveyed executives cited the cost of materials and components as their top concern, ahead of tariffs or the reliability of suppliers themselves. Even as pandemic-era bottlenecks fade, a lack of real-time visibility into supply chains continues to hamper decision-making, according to AlixPartners.
AI, software and the workforce gap
The industry’s long product cycles and capital intensity make rapid adaptation difficult. Executives see opportunity in autonomous features, software-defined vehicles and artificial intelligence. The majority now view AI as a revenue driver, not just a cost-cutting tool, and are pursuing business model changes to harness its potential. Yet, for many, the immediate focus remains on using AI to reduce costs rather than to generate new income streams.
Workforce concerns are mounting. More than half of automotive executives now doubt their company’s ability to attract and retain skilled talent, especially as the sector converges with technology. The skills gap is particularly acute in engineering and software, with executives admitting that internal pipelines are not keeping pace with demand. This comes as 45% of CEOs in the sector fear for their own jobs, and 85% say they need more support, a higher proportion than in any other industry surveyed.
Geopolitics and the future of growth
Despite these pressures, executives see revenue potential in new technologies and business models. The challenge is converting disruption into growth when product cycles are long and the external environment shifts rapidly. For now, the sector remains defined by volatility: tariffs that raise costs, technologies that demand investment, and a workforce gap that is proving stubbornly hard to close.
