Chinese automakers bet big on humanoid robots as the next profit engine

A wave of Chinese automakers is betting that humanoid robots will generate more profit than cars in the near term, with Xpeng's robotics unit raising over $900 million, BYD unveiling a humanoid called Xiao Di, and AiMOGA preparing for an IPO. For builders working on embodied AI, this signals serious capital and manufacturing muscle entering the space, but the AI capabilities of these robots still lag behind hardware advantages.

The $900 million signal from Xpeng

Xpeng's robotics unit raised more than $900 million at a post-money valuation above $6.3 billion, described as the largest single-round private financing in China's embodied AI industry. The round was led by IDG Capital with participation from Gaorong Ventures, Tencent, and Alibaba. Xpeng founder He Xiaopeng and co-president Brian Gu reportedly invested about $100 million of their own money.

The company's humanoid robot, Iron, has a realistic human shape and targets commercial deployment. Analyst Michael Dunne of Dunne Insights told TechCrunch that Xpeng founder He Xiaopeng "sees razor-thin profit in cars on the near horizon. Robots look much more promising."

A broader industry push

This isn't just one company's bet. AiMOGA, the robotics unit of Chery Automobile, is reportedly preparing for an IPO. BYD has unveiled its own humanoid robot, Xiao Di. Other Chinese automakers including Changan, GAC, Li Auto, SAIC, and Seres are also developing humanoid robots.

Outside China, Hyundai-owned Boston Dynamics plans to deploy Atlas in a Georgia factory by 2028 and is opening a Robot Metaplant Application Center in the U.S. Mobileye acquired humanoid robot startup Mentee Robotics for $900 million, and Rivian is pursuing a Mind Robotics spinout.

Manufacturing edge, AI question mark

Chinese automakers bring a clear hardware advantage: supply chains, mass production experience, and existing factories. As Dunne put it, "They have all the hardware to get the job done. Question is if they can catch Tesla on the AI side of the equation."

For AI builders, this matters because the bottleneck in humanoid robotics is shifting from hardware cost to the AI stack: perception, manipulation, planning, and generalization. Chinese automakers can produce robots at scale, but whether they can match the software and AI capabilities of Tesla, Boston Dynamics, or Figure remains an open question. The quality of their embodied AI will determine whether these robots are genuinely useful for factory tasks or just expensive demonstrations.

What builders should watch

If you're building AI agents for physical environments, the next few years will bring more capable hardware platforms at lower cost. That could accelerate deployment of autonomous systems in warehouses, assembly lines, and logistics. But the real unlock will come from the AI layer, not the hardware. Anyone building simulation tools, robot learning frameworks, or control stacks for humanoids should pay attention to the platforms these automakers open up.

Caveats and unknowns

Timelines for commercial deployment are unclear. Xpeng has not announced specific production dates for Iron. BYD's Xiao Di is early in development. The funding round, while large, does not guarantee a working product. The comparison to Tesla Optimus is based on market positioning rather than proven benchmarks. And the ability of these automakers to hire or retain AI talent remains a risk factor.