Chinese automaker Xpeng touts AI pivot in face of fierce competition

By David Kirton

GUANGZHOU, China, Jan 9 (Reuters) – Chinese automaker Xpeng said it wanted to become better known as a “physical AI” company rather than just a carmaker, as it gears up to launch street trials of robotaxis and start mass producing humanoid robots later this year.

Robots and autos are the core of physical artificial intelligence and share a wide range of existing sensor tech and other hardware. Automakers, for example, are creating robots to automate warehouse and factory tasks. He Xiaopeng, founder and CEO of the company – one of China’s best-selling electric vehicle startups and a Volkswagen partner – on Thursday said that with automakers facing intense competition, integrated AI capabilities with XPeng’s in-house “Turing” AI chip will give it an advantage.“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, a company with strong differentiation.The effort to reposition itself echoes similar efforts by Elon Musk’s Tesla to expand into making humanoid robots and robotaxis as part of a sharp rise in the use of AI globally. Underlining growing interest in physical AI, chip technology company Arm Holdings told Reuters this week that it had reorganized to create a physical AI unit to expand its presence in the robotics market. Another Chinese automaker, Li Auto in 2023 unveiled a repositioning towards AI, with founder Li Xiang saying that it had invested more than 6 billion yuan ($859.1 million) in AI models, computing power and infrastructure annually.

Xpeng’s shift also comes as China’s auto market, the world’s largest, has been embroiled in a years-long price war that has hurt profits. Xpeng’s He unveiled four revamped car models at the Guangzhou event, emphasizing new software features including 3D navigation systems, advanced hazard alerts beyond the immediate line of sight and improvements in autonomous driving systems. He said Xpeng has also been hiring and investing in developing autonomous driving and humanoid robots centred on its in-house AI capabilities. The company will begin mass production of humanoid robots in the second half of 2026 and will begin street trials of robotaxis “very soon,” He said. Xpeng recorded a net loss of 380 million yuan in the third quarter and He previously said he expected to break even by the end of 2025.

(Reporting by David Kirton in Guangzhou, Additional reporting by Zhang Yan in Shanghai; Editing by Brenda Goh and Thomas Derpinghaus)