Xpeng's robotics division secured more than $900 million in funding this week at a valuation exceeding $6.3 billion, marking what the company calls the largest single-round private investment ever in China's "embodied AI" sector, according to a TechCrunch report published August 28. The deal signals that Chinese car manufacturers are increasingly betting that humanoid robots, not vehicles, will drive their next wave of profits. Led by IDG Capital with backing from Gaorong Ventures, Tencent, and Alibaba, the investment reflects a broader shift among Chinese automakers toward robotics as margins in the electric vehicle market shrink.
The fundraising comes as multiple Chinese car companies push into humanoid robotics this month. AiMOGA, the robotics arm of Chery Automobile, has started preparations for an initial public offering, while BYD introduced a humanoid robot named Xiao Di. Beyond those two, Changan, GAC, Li Auto, SAIC, and Seres are all working on their own humanoid robot projects. Xpeng founder He Xiaopeng and co-president Brian Gu invested roughly $100 million of their personal wealth into the robotics unit's latest round, the Wall Street Journal reported. Xpeng's robot, called Iron, features a human-like form designed for commercial use.
Among Chinese automakers, Xpeng is "the most focused on autonomy" and "the first to commit in a big way to humanoid robots," according to Michael Dunne, CEO of advisory firm Dunne Insights. Dunne explained that Xpeng's founder "sees razor-thin profit in cars on the near horizon," while "robots look much more promising." The report notes that Chinese automakers possess a manufacturing advantage, with Dunne observing they "have all the hardware to get the job done." The lingering question, he added, is "if they can catch Tesla on the AI side of the equation."
The push by Chinese automakers follows Tesla's strategy and reflects genuine technical progress in robotics, driven by improvements in physical capabilities and the belief that AI methods from large language models can teach robots to master nearly any task. That momentum has drawn competitors worldwide. Hyundai-owned Boston Dynamics plans to deploy its Atlas humanoid robot at a Georgia factory this year, with full-scale parts sequencing operations expected by 2028. The Korean automaker, working with Google's DeepMind, is opening a U.S. facility this year to train robots in complex movements. Automotive supplier Mobileye acquired humanoid robot startup Mentee Robotics for $900 million earlier this year, while Rivian has launched a robotics spinout called Mind Robotics, though its machines won't resemble the humanoid designs elsewhere. Companies like Agility Robotics, Apptronik, and Figure are all racing toward the same finish line: large-scale commercial deployment of humanoid robots that can work alongside humans in factories and warehouses. The competitive advantage may ultimately hinge less on manufacturing prowess and more on which company can integrate advanced AI systems fast enough to make robots genuinely adaptable across unpredictable real-world tasks. What remains unclear is whether the enormous capital flooding into humanoid robotics will translate to revenue before investor patience runs thin.