With a staggering record-setting investment round exceeding $900 million, Xpeng’s robotics arm has drawn focus to the intensifying global competition among Chinese automotive manufacturers in the race to create practical humanoid robots for the commercial market.
Recent strides in robotics are transforming the automation industry, largely propelled by simultaneous progress in artificial intelligence and hardware. Projects such as Tesla’s Optimus and Atlas by Boston Dynamics have captured public imagination, but it is the active participation of Chinese automakers that is beginning to redirect the momentum within the industry.
Robotics Innovation at the Heart of China’s Auto Sector
A funding round announced earlier this week saw Xpeng’s robotics unit raise over $900 million, setting their post-money valuation above $6.3 billion. The round, led by IDG Capital, included backing from Gaorong Ventures, Tencent, and Alibaba, marking the largest-ever single private investment in China’s burgeoning “embodied AI” field. Embodied AI encompasses artificial intelligence seamlessly embedded into machines able to interact with real environments, like humanoid robots.
Notably, Xpeng co-founder He Xiaopeng and co-president Brian Gu together invested nearly $100 million of their own funds, according to a report in the Wall Street Journal.
Intended to break into the robotics industry as profit margins tighten in automotive production, Xpeng’s lead initiative, the Iron humanoid robot, targets commercial practicality. Michael Dunne, CEO of Dunne Insights, points to Xpeng’s swift advancements and autonomous technologies, emphasizing that the company closely follows and challenges Tesla in robotics innovation. “He sees razor-thin profit in cars on the near horizon. Robots look much more promising,” Dunne said, describing Xpeng’s future plan.
Other Chinese automakers are also stepping up their robotics efforts. This month, AiMOGA, Chery Automobile’s robotics segment, started to pursue an IPO, while BYD launched the humanoid robot Xiao Di. Further names in China—including Changan, GAC, Li Auto, SAIC, and Seres—are actively developing new robotic systems.
Automotive Giants Join the International Robotics Contest
According to Dunne, Chinese carmakers enjoy a “manufacturing edge” due to their robust experience with hardware. A key question remains, however, about their ability to compete with Western expertise in artificial intelligence—especially as modern robotics increasingly depend on advanced AI, such as large language models, to perform adaptable, intelligent behavior.
Innovation in humanoid robotics extends well beyond Chinese borders. Companies in the United States—including Agility Robotics, Apptronik, and Figure—are pushing for scalable, commercial deployment of robotic systems.
Hyundai, the parent of Boston Dynamics, is bringing the Atlas humanoid robot to its Georgia facility later this year and plans to phase in robots for repetitive jobs like parts sequencing before a wider rollout by 2028. To bolster Atlas’ progress, Hyundai has partnered with Google’s DeepMind and is planning the launch of a U.S.-based Robot Metaplant Application Center, aimed at training robots to master complex movements. Additional details can be found here.
Major players extending beyond car manufacturers are joining the trend. This year, Mobileye purchased humanoid robotics startup Mentee Robotics for $900 million in an effort to move into robotics. Rivian has also spun off Mind Robotics, which focuses on innovative next-gen robots that do not necessarily follow traditional humanoid designs, as described here.
Ahead: Moving Humanoid Robots from Hype to Reality
Backed by robust financial support, ongoing technical advances, and a clear goal to diversify business beyond cars, carmakers—both in China and around the world—are dramatically ramping up their efforts to deliver practical humanoid robots. In the years ahead, the leaders in this fast-moving sector will be revealed as prototypes are tested in real-world settings, potentially transforming industries such as logistics, manufacturing, and services along the way.