Chinese electric vehicle maker XPeng said it wants to be seen as a “physical AI” company rather than just an automaker, as it prepares to begin street trials of robotaxis and start mass production of humanoid robots later this year.
Founder and Chief Executive He Xiaopeng said robots and cars share a common technological foundation, including sensors, chips and control systems, making automakers natural participants in the emerging field of physical artificial intelligence.
“XPeng definitely does not want to become a car company that simply sells hardware cheaply,” He said at an event in Guangzhou. “We want to become a global technology company with strong differentiation.”
He said XPeng’s in-house “Turing” AI chip and its integrated software and hardware capabilities would give the company an advantage at a time when competition in China’s electric vehicle market is intensifying and squeezing margins.
Physical AI refers to artificial intelligence systems embedded in physical machines such as vehicles, robots and industrial equipment, allowing them to perceive, reason and act in the real world. Automakers have increasingly turned to robotics to automate tasks in warehouses and factories, and to develop autonomous driving systems.
XPeng’s effort to reposition itself echoes similar moves by Tesla, whose chief executive Elon Musk has said the company plans to make humanoid robots and operate robotaxi fleets as AI adoption accelerates.
The shift also reflects broader interest across the technology industry. Arm Holdings said this week it had reorganised its operations to create a dedicated physical AI unit in order to expand its presence in the robotics market.
In China, automakers have increasingly framed themselves as AI-driven technology companies rather than traditional manufacturers.
Li Auto in 2023 said it was repositioning itself as an artificial intelligence company. Its founder Li Xiang said at the time that the company was investing more than 6 billion yuan ($859 million) annually in AI models, computing power and related infrastructure.
XPeng is among China’s best-selling electric vehicle startups and is a partner of Volkswagen in China. The company has said it plans to roll out robotaxi street trials in selected cities and to begin producing humanoid robots for industrial and commercial use, though it has not disclosed specific volumes or timelines.
Analysts say the push into robotics and autonomous systems is part of a broader effort by carmakers to diversify revenue sources as China’s EV market becomes more crowded and price competition intensifies.
China is the world’s largest market for electric vehicles, but slowing demand growth and aggressive discounting have weighed on profitability across the sector, prompting companies to seek higher-margin opportunities in software, services and advanced technology.
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