Dealerships have been warned they may still fall within scope of the European Union’s Artificial Intelligence Act despite the UK no longer being part of the EU.
The alert from IMAGIN.studio comes ahead of the legislation becoming fully applicable on August 2 with concerns that many UK-based businesses are underestimating their exposure when operating across borders.
The company said firms selling vehicles into EU markets or using AI-generated content visible to EU consumers could be subject to the regulation.
Cross-border compliance risk
The EU AI Act applies not only to organisations established within the EU, but also to those placing AI systems or their outputs on the EU market. For automotive businesses, this includes vehicle listings and marketing assets accessed by EU customers.
IMAGIN.studio highlighted that one of the most immediate implications stems from Article 50, which requires clear disclosure when images, video or audio content have been generated or significantly altered using AI.
This could affect commonly used dealership tools such as AI-generated backgrounds, enhanced vehicle imagery and synthetic configurations used in online listings targeting EU buyers.
Martijn Versteegen, CEO at IMAGIN.studio, said: “There is a misconception in the UK that the EU AI Act is not relevant post-Brexit. In reality, if a UK automotive business is selling into Europe or operating a platform accessible to EU consumers, the regulation can still apply. Many companies are already exposed without realising it.”
Liability and finance impact
The guidance also warns of deployer liability, meaning responsibility sits with the organisation using the AI system rather than the vendor supplying it.
As a result, dealerships cannot rely solely on third-party providers to ensure compliance and must instead understand how AI is used across their digital and marketing operations.
IMAGIN.studio also pointed to potential copyright risks linked to generative AI, noting that purely AI-generated images may not qualify for legal protection, leaving marketing assets vulnerable to reuse.
Beyond marketing, leasing companies and finance providers operating in EU markets could also be affected. AI systems used for credit scoring are classified as high-risk, requiring strict governance, documentation and human oversight.
The regulation further introduces AI literacy requirements, meaning businesses must demonstrate that employees understand the tools they are using and the associated risks.
Versteegen added: “For UK automotive businesses, this is not just about compliance in Europe. It is about understanding how AI is used across your organisation, protecting your intellectual property and maintaining customer trust in digital retail environments.”
The company also drew a distinction between generative AI and deterministic image creation methods. While generative models fall within transparency requirements, physics-based 3D rendering using CAD data follows a controlled, human-directed process.
“Not all automated imagery is treated the same under the regulation. Automotive companies need to understand how their visuals are created, and whether those methods trigger transparency obligations or impact ownership rights,” said Versteegen.
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