London (CNN Business) Brexit is holding back innovation at Europe's carmakers by diverting attention from the big technological challenges facing the industry.

Senior tech executives at BMW and Volkswagen say the United Kingdom's departure from the European Union could cause the region to fall behind Asia and America because it is disrupting operations, threatening collaboration in research, and draining resources.

"The Brexit debate is capturing the entire Europe, which is not going to accelerate technological growth," Martin Hofmann, Volkswagen's ( VLKAF ) chief information officer, told CNN Business at the Web Summit in Lisbon, Portugal. "It's distracting us."

Europe's car industry pours €54 billion ($61.3 billion) into innovation every year, according to the European Automobile Manufacturers' Association. That makes it the leading investor in research and development in Europe.

But that spending is under threat. The Society of Motor Manufacturers and Traders said investment into new models and facilities in the United Kingdom slumped 47% in the first half of the year.