Tesla inspires China’s carmakers to invest in robots

At a $6.3 billion valuation, Xpeng Robotics has just secured $900m in financing, which is the largest ever funding for the physical AI robotic industry in China. The investment is led by IDG Capital with participation from Tencent and Alibaba. Meanwhile, BYD has showcased its new humanoid robot Xiao Di, while Chery plans to list its AiMOGA subsidiary on the stock market via IPO. And there are more: Changan, GAC, Li Auto, SAIC and Seres are all getting into the game — you name it, all the big Chinese car makers!

The core rationale is that the profit margin in the auto industry is getting lower while these traditional car companies have the advantage of existing manufacturing capability and supply chain, which makes them better positioned than the pure-play startups. The real fight is for the humanoid robot’s AI layer, so this is where the key battle happens.