China’s EV Boom Is Losing Steam. Carmakers Are Now Pouring Money Into Humanoid Robots.

Chinese electric-vehicle makers are expanding into humanoid robots as intense competition and weaker profitability put pressure on their car businesses, with companies including XPeng, Xiaomi and Geely looking for new uses for technology developed for intelligent vehicles.

Automakers in the country accounted for more than half of the nearly 20 car companies worldwide that had entered humanoid robotics through direct development, investments or incubation as of August, Counterpoint Research data cited by CNBC showed.

Kevin Li, associate director at Counterpoint, told the outlet that the expansion is partly aimed at reshaping automakers' "capital valuation narratives," while helping establish them as technology companies and potentially creating another source of growth.

XPeng has made one of the industry's biggest moves. Its robotics unit raised more than $900 million in August, valuing the business at more than $6.3 billion. IDG Capital led the financing, with Tencent and Alibaba participating as strategic investors.

The company took another step this week when its IRON humanoid walked off its newly commissioned production line. XPeng said Tuesday that more than 80% of the core processes on the line are automated as it prepares for mass production.

XPeng plans to initially deploy the robots in its own stores and other business locations before expanding sales in China and overseas. The company has designed IRON as a general-purpose humanoid rather than limiting it to factory work.

Other automakers are taking different routes into the sector. Nio's venture-capital arm has invested in humanoid robotics companies including LimX Dynamics and Acorn Robot, while Xiaomi has been testing humanoid robots in its factories. BYD and Geely are also among the Chinese automakers exploring the technology.

The shift comes as China's EV manufacturers contend with slower sales growth and heavy price competition. Jing Yang, director of Asia-Pacific corporate ratings at Fitch Ratings, told CNBC that diversification into robotics was a "natural strategic move" because automakers can apply technologies developed for EVs to other products.

Humanoids share several components and technologies with intelligent vehicles, including batteries, motors, chips, sensors and AI software. Chinese automakers also have established supply chains and experience manufacturing complex products at scale.

XPeng, for example, can reuse about 85% of its motors, chips and smart-driving software in its humanoids, Jefferies senior research analyst Xiaoyi Lei told CNBC. Automakers can also put robots into their own stores and factories, giving them places to test the machines and collect real-world data without first finding outside customers.

China already has a strong position in the emerging humanoid market. Counterpoint Research said global humanoid robot sales exceeded $500 million in 2025, with Chinese companies occupying all three of the top positions by revenue.

Commercial demand, however, remains an obstacle. Lei added that Jefferies had not yet seen firm external orders from the automakers it covers or clear guidance about outside customers and robotics revenue for next year.

Questions about demand have also surfaced elsewhere in China's robotics industry. Government-backed training centers have become major buyers of humanoids, while broader private-sector adoption remains at an early stage, the Financial Times reported last month.

Unitree founder Wang Xingxing has also cautioned against expectations of rapid commercialization, saying last month that a "ChatGPT moment" for humanoids could still be five to 10 years away.

Automakers face technical hurdles as well. Software designed for smart vehicles cannot simply be transferred to machines expected to walk, manipulate objects and perform a wide range of physical tasks, Lei said.

"The real challenge is how they are going to make the algorithm and software stack that is used to be applied to the smart driving system also viable to the humanoid scenario," she told CNBC, describing that task as significantly more difficult.

For XPeng, the push has already moved beyond prototypes and demonstrations. Its new production line gives the automaker a way to apply manufacturing capabilities built for cars to humanoids, while the next test will be finding customers beyond its own operations.