Chinese electric vehicle makers that rushed into cars a decade ago are now betting on humanoid robots as the domestic car market loses momentum. Companies such as XPeng are announcing robot production plans even as questions linger over the commercial viability of humanoids, according to a report from CNBC.
The push comes as China’s EV sales are on track for their worst year since 2021. XPeng shares have tumbled more than 45% this year, making it the worst performer among major EV players, while BYD — the industry giant — has lost more than 13% as sales slumped.
Diversification as a survival strategy
Kevin Li, associate director at Counterpoint Research, said the move into robotics is part of a bid to reshape “capital valuation narratives.” Automakers are also trying to reinforce the perception that they are tech companies, not just car manufacturers, and to build a second growth curve.
Chinese automakers accounted for more than half of the nearly 20 car companies globally that have entered the humanoid robotics space through in-house development, investment or incubation as of August, according to Counterpoint. Nio’s venture arm, for instance, has invested in robotics startups such as LimX Dynamics and Acorn Robot, per PitchBook data.
Xiaomi, Li Auto and Geely are also active in robotics, though their strategies differ.
“Given the slowing growth and weakening profitability in the EV market — particularly domestically — it is a natural strategic move for EV companies to diversify into new applications such as robotics,” said Jing Yang, director of Asia-Pacific corporate ratings at Fitch Ratings. “This allows them to pursue alternative growth drivers, achieve economies of scale for shared advanced technologies, and potentially improve profitability over the medium term.”
The urgency is clear: the average profit margin in China’s vehicle manufacturing sector stood at just 1.5% in the first half of 2026, according to data from the China Association of Automobile Manufacturers cited by Counterpoint.
Robots in-house first
XPeng raised $900 million for its robotics business last month — the largest single round in China’s “embodied” AI industry, according to the company. The raise valued XPeng’s robotics unit at more than $6.3 billion, on par with the $6.5 billion estimated value for its EV business, per Citi.
XPeng said Tuesday it plans to start mass production of its robots by the end of this year, initially deploying them in its own stores and business venues. Next year, it intends to launch the robots to the broader market in China and overseas.
Chinese EV makers have advantages over their U.S. counterparts, said Xiaoyi Lei, senior research analyst at Jefferies Hong Kong. She noted that XPeng can reuse 85% of its motors, chips and smart-driving software in humanoids. Robots can also be deployed immediately in the automakers’ stores and factories, rather than waiting for consumer adoption.
“Chinese players are the ones actually pushing it into daily use,” Lei said, adding that in-house deployment makes it easier and cheaper to collect data — critical for humanoid commercialization.
Xiaomi, which only launched its first electric car in 2024, began testing humanoid robots in its factory this year. BYD could also deploy robots in its factories, Counterpoint’s Li said, though he argued Geely and XPeng are better positioned to capture the benefits of diversification over the medium-to-long term, given XPeng’s emphasis on physical AI.
Unanswered questions
Whether humanoid robots will generate demand beyond automakers’ own operations remains an open question. Lei said Jefferies has yet to see firm external orders from the automakers it covers, or clear guidance on external customers and robotics revenue for next year.
Even leading robotics firm Unitree — whose shares surged on their Shanghai debut last month — has seen the stock fall in 12 of 16 sessions since listing. Founder Wang Xingxing has cautioned that commercialization could still take years, with the sector’s “ChatGPT moment” possibly a decade away.
Reusing car technology for robots may also be less straightforward than it seems. “The real challenge is how they are going to make the algorithm and software stack used for smart driving viable in the humanoid scenario, which is more difficult and more challenging,” Lei said.
Source: www.cnbc.com — https://www.cnbc.com/2026/09/09/chinas-ev-makers-shift-gears-to-focus-on-humanoids-as-car-market-slows.html
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