XPeng repositions itself as a "Physical AI" company, advancing autonomous driving and humanoid robot strategies

Faced with increasingly fierce competition in China’s electric vehicle market, XPeng Group is undergoing a strategic shift. This leading Chinese electric vehicle startup aims to redefine its public perception — no longer simply seen as an automaker, but as a technology company focused on “Physical AI.” Founder and CEO He Xiaopeng stated at an event in Guangzhou that this transformation aims to establish a competitive advantage through integrated AI capabilities and the self-developed “Turing” chip.

Product Innovation and Technical Roadmap

At the event, XPeng showcased four upgraded model cars, highlighting advancements in software features. These updates include 3D navigation systems, enhanced warning technologies, and improvements to autonomous driving systems. The company emphasized breakthroughs in the integration of software and hardware in the new generation of model cars, reflecting XPeng’s core goal of transitioning to Physical AI.

He Xiaopeng explicitly stated that XPeng “absolutely does not want to become a car company that simply sells hardware at low prices,” but instead aims to be “a global technology enterprise with clear differentiated competitiveness.” This strategic positioning underscores the company’s focus on technological depth and brand value.

Robot and Autonomous Driving Timeline

In terms of humanoid robots, XPeng plans to start mass production in the second half of 2026. Additionally, the company’s robotaxi (autonomous taxi) street testing will “begin soon.” Both product lines are based on XPeng’s proprietary AI capabilities, representing the company’s shift from traditional automaker to technology enterprise.

Financial Status and Profitability Goals

XPeng reported a net loss of 380 million RMB in the third quarter. Nevertheless, He Xiaopeng previously announced the company’s goal to achieve profitability by the end of 2025. This commitment indicates that despite short-term financial pressures, XPeng remains confident in its AI strategy and product roadmap for the long term.

Industry Trend Observations

This strategic adjustment is not an isolated case within the industry. Electric vehicle competitor Li Auto also announced a similar AI shift in 2023, investing over 6 billion RMB (approximately $859 million) annually in AI models, computing power, and infrastructure. Meanwhile, global chip design company Arm Holdings stated to the media this week that it has reorganized and created a Physical AI division to expand its market position in the robotics field.

These initiatives demonstrate that, amid the accelerating global AI application trend, tech companies are expanding new growth avenues through Physical AI and automation technologies. For XPeng, this transformation is both a necessary response to fierce competition and a microcosm of Chinese automakers’ industry upgrade.