NEW YORK—Digital technology will help legacy automakers transition from internal combustion engines to battery-powered vehicles over the next decade. A new report from ABI Research predicts that the auto industry will increase investment in digital twins and other tools at a cumulative annual rate of nearly 9 percent, growing from $83 billion in 2023 to $188 billion by 2033.

“The transfer to EVs is driving demand for software, as manufacturers need to design new vehicles and simulate the vehicles’ performance,” says Michael Larner, industrial and manufacturing markets research director at ABI Research. “The new production lines will also need to be simulated before launch.

“Manufacturers are realizing the potential of digital twins to enable teams to collaborate to bring the new operations to life,” explains Larner. “[However], before creating digital twins, automobile manufacturers will need to remove data silos and create digital threads with suppliers such as Amazon Web Services, Google, Nvidia and Siemens.”