Chinese EV Makers Turn to Humanoid Robots as Car Sales Slow

Chinese electric-vehicle manufacturers are accelerating development of humanoid robots as domestic auto sales head toward their weakest year since 2021. Xpeng displayed its IRON robot at the Guangdong-Hong-Kong-Macao Greater Bay Area International Auto Show on May 31, 2026. The company raised $900 million for the robotics unit, valuing the division at over $6.3 billion—roughly equal to the $6.5 billion estimated value of its EV business. Xpeng plans to begin mass production of the robots by the end of 2026, initially for use in its own stores and factories, with broader market launch slated for the following year.

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China’s EV market is confronting a sharp slowdown. Industry data show sales are set for the poorest performance since 2021, and the average profit margin for vehicle manufacturers fell to 1.5 % in the first half of 2026, according to the China Association of Automobile Manufacturers. Xpeng’s shares have tumbled more than 45 % this year, the steepest decline among major EV players, while BYD’s shares are down more than 13 %. Counterpoint Research reports that Chinese automakers now account for over half of the roughly 20 global firms that have entered the humanoid-robotics sector through in-house development, investment or incubation.

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Xiaoyi Lei, senior research analyst at Jefferies Hong Kong, highlighted that Xpeng can reuse 85 % of its motors, chips and autonomous-driving software for humanoids, allowing immediate deployment in stores and factories and faster data collection.

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• “Given the slowing growth and weakening profitability in the EV market—particularly domestically—it is a natural strategic move for EV companies to diversify into new applications such as robotics,” — Jing Yang, director of Asia-Pacific corporate ratings at Fitch Ratings

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Xpeng has announced that robot mass production will start by the end of 2026, with a rollout to the broader Chinese and overseas markets in 2027. Other automakers—including BYD, Xiaomi and Geely—are testing or planning similar deployments in factories, signaling a broader industry shift toward embodied AI applications.

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