GEOKHUB | Guangzhou, China — Jan 9 Chinese electric vehicle maker Xpeng says it wants to be known as far more than a car manufacturer, outlining an ambitious pivot toward “physical artificial intelligence” as competition intensifies across China’s crowded auto market.
The company plans to begin street trials of robotaxis in the near term and aims to start mass production of humanoid robots in the second half of 2026, according to founder and CEO He Xiaopeng, who spoke at a company event in Guangzhou.
Physical AI refers to the integration of artificial intelligence into machines that interact directly with the real world, including vehicles and robots. Xpeng believes the overlap in sensors, chips, and hardware between electric cars and robotics gives automakers a natural advantage in the emerging field.
“With automakers under enormous pressure, pure hardware sales are no longer enough,” He said. “Xpeng does not want to be a company that competes only on price. Our goal is to become a global technology company with real differentiation.”
Xpeng, one of China’s best-selling EV startups and a partner of Volkswagen, is betting that deep integration of AI — powered by its in-house Turing AI chip — will set it apart as rivals slash prices to protect market share.
The company’s strategy mirrors a broader global trend, with automakers increasingly positioning themselves as AI and robotics firms. Tesla has similarly pushed into humanoid robots and autonomous driving, while chipmakers and software companies are reorganizing to capture opportunities in robotics and embodied intelligence.
Within China, competition is particularly fierce. Rival automaker Li Auto previously announced a multibillion-yuan annual investment in AI models, computing infrastructure, and autonomous systems, highlighting how quickly the sector is shifting beyond traditional vehicle manufacturing.
Xpeng’s pivot comes against the backdrop of a prolonged price war in China’s auto market — the world’s largest — which has weighed heavily on profit margins. The company reported a net loss of 380 million yuan in the third quarter, though He has said he expects Xpeng to reach break-even by the end of 2025.
At the Guangzhou event, Xpeng unveiled four updated vehicle models, showcasing new software-driven features such as enhanced 3D navigation, advanced hazard detection beyond the driver’s line of sight, and improvements to autonomous driving systems.
He said the company has been aggressively hiring engineers and expanding investment in autonomous driving and robotics development, all centered around its proprietary AI architecture.
“Robots and cars are just two forms of the same intelligence,” He said. “Our focus is building systems that can see, think, and act in the physical world.”
