Legacy automakers such as Renault, Jaguar Land Rover and Ford need to work harder to catch up with digital natives such as Tesla, Nio and Xiaomi in terms of software mastery, according to Gartner’s 2025 Digital Automaker Index.

Automakers in the lead, which Gartner calls “new incumbents,” increased their combined overall score in eight software-focused criteria to 61.6 percent in 2025 from 60.6 percent in 2024, according to the latest index. The score for legacy automakers slipped to 33.8 percent this year from 34.1 percent in 2024.

“This is because the average legacy player hasn’t shown substantial internal transformation at the leadership and culture levels and also hasn’t yet shown major progress with tech in their products,” Gartner Vice President of Research Pedro Pacheco said.

Twenty-four automakers were evaluated on the steps taken through July 2025 to become a digital automaker in the future, with an emphasis on the company’s ability to monetize its software.

The underlying questions the survey asks of the companies are 1) How much is software truly a priority today and 2) How advanced is the automaker’s vehicle technology in areas that are heavily influenced by software.

In 2025, Chinese automakers as a whole did best, raising their combined score to 53 percent from 49 percent in 2024.

U.S. automakers also improved as a whole, raising to 50 percent from 49 percent last year.

European automakers had their worst result in the three years the study has been conducted, falling to 33 percent in 2025 from 34 percent last year.

Tesla triumphs for 3rd straight year while Xiaomi surprises

Tesla was No. 1 in the index for the third consecutive year, increasing its score to 79.3 percent from 77 percent in 2024.

The EV maker earned the best score in a key category: culture and leadership. The reasons cited in the index include the high number of direct reports to the CEO with strong experience in the digital world.

CEO Elon Musk was praised for having “advanced tech world expertise” because the index authors believe this trait puts a company “in a privileged position to better monetize software.”

Chinese EV maker Nio came in second, up 8 percentage points to 76.9 percent.

Nio’s ET9 flagship electric sedan was the only car to reach Level 5 of S&P’s Readiness Framework in 2025, representing the pinnacle of software-defined vehicle capability.

Like Musk, Nio CEO William Li was praised for his technical expertise and his ability to find ways to monetize the company’s software.

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The biggest mover in the ranking, however, was China’s Xiaomi. The smartphone and consumer electronics maker entered the ranking at No. 3.

“Xiaomi is a software-focused company,” Pacheco said. “Its focus on talent, its prioritization of building technology into vehicles, the choices made in terms of new architecture is the fruit of its benchmarking against existing competitors. As it only started with cars last year, it still has some time to prove how it can improve.”

Xiaomi, the so-called “Apple of China,” is investing $10 billion to become a player in the car market. Last year, it launched the SU7 electric sedan, which has been outselling Tesla’s more expensive Model 3 in China. Xiaomi also introduced its new electric YU7 in July. This is the closest rival in China to Tesla’s bestselling Model Y.

The company’s billionaire founder, Lei Jun, has said that he will make the SU7 available globally. He hinted at a European entry by showcasing the vehicle during the Summer Olympics last year in Paris and setting up a garage at the Nürburgring racetrack in Germany.

Several legacy automakers struggled

At the same time, the index showcased the software struggles at several legacy automakers.

Renault finished third from the bottom in the ranking, down 32 percent to 24.6 percent.

The reasons cited in the index for the drop included the head of car software no longer reporting into the CEO, the average salaries Renault pays its software engineers are not keeping pace with rivals and the performance of its advanced driver-assistance systems declined.

Meanwhile, Mazda was second to last in the ranking, just ahead of JLR, which slipped 6 percent to 23.4 percent.

Despite the poor result, Pacheco pointed out that the index focuses solely on the ability of an automaker to extract value from software.

Several automakers at the bottom of the index have other strengths that will keep them market-relevant for several years, he said. He warned, however, that those automakers “have to face difficult choices if they persist in not efficiently addressing their software-related limitations.”

While laggards can always acquire technology to catch up on products, it’s not yet guaranteed they can do this in a cost-efficient and agile way, he said.

Hyundai, Stellantis and GM make progress

Legacy automakers such as Stellantis, General Motors and Hyundai/Kia made encouraging progress by adding more tech-focused executives to their boards, consistently providing over-the-air updates and offering models with voice assistants that use large language models, the index noted.

“However, this should be seen as just the beginning,” Pacheco said. “There is still a long way for these companies to go to reach the top position.”

Hyundai/Kia rose 33 percent, showing the biggest improvement on the index. This follows an increase in the number of board members with tech experience; the head of car software becoming part of the executive board; and a strong improvement in the competitiveness of salaries paid to its software engineers. Hyundai/Kia also now sells over-the-air updates and offers EV models that can charge at least at 350 kilowatts, which requires more advanced electronics and software.

Stellantis’ score was up 29 percent as it added more board members with tech experience and increased the percentage of vehicles sold with a modern centralized architecture. It now also offers 5G in some of its production cars. In addition, it has improved the energy efficiency of its top battery-electric vehicles with more advanced software and hardware.

Finally, General Motors made a 16 percent improvement as it welcomed more board members with tech experience and increased the percentage of vehicles sold with modern centralized architecture and with hands-free driver assistance systems.

Overall, in the ranking, the percentage of executive board members coming from the tech world increased to 20.3 percent in 2025 from 12.8 percent in 2024. The percentage of CEOs with major digital experience slipped slightly to 12.8 percent from 13 percent.

The industry, on average, is heading in the right direction — but mostly thanks to the performance of new incumbents, Pacheco said.

It will be interesting to see how legacy players such as BMW and Mercedes-Benz progress after they introduce their new generation vehicle architectures, he added.

BMW will debut its Neue Klasse technology platform in September and Mercedes next month will unveil the new full-electric GLC SUV, which will be underpinned by its new MB.EA platform dedicated to EVs.