XPENG’s Physical AI division has secured more than $900 million in funding, giving the business a valuation of approximately $6.3 billion. The investment will support the development and expansion of XPENG’s IRON humanoid robot platform.
The Chinese electric vehicle manufacturer announced the latest funding round for its robotics business through a series of share purchase agreements with multiple investors. According to XPENG, the deal represents one of the largest single-round private investments in China’s Physical AI industry to date, based on both the amount raised and the resulting valuation.
He Xiaopeng, Chairman and CEO of XPENG, said the company has spent the past 12 years building its own technological capabilities through extensive in-house research and development.
“Over the past 12 years, XPENG has remained committed to full-stack in-house R&D, building a strong technological foundation for the Physical AI era, including our physical-world foundation model, Turing AI chips, and AI infrastructure,” He said.
He added that these technologies have enabled XPENG to move toward a new stage of mass production and commercial deployment of advanced humanoid robots.
XPENG Shares Continue to Face Pressure
Despite the significant investment in its robotics business, XPENG’s stock continues to face pressure.
At the time of writing, XPENG shares were down 7.22 percent, while the stock had declined approximately 51.24 percent over the previous 12 months.
XPENG’s core electric vehicle business is facing increasingly intense competition in China from domestic EV manufacturers. The company is also competing with Tesla in both international and Chinese markets.
Against this backdrop, investors are placing a $6.3 billion valuation on XPENG’s robotics division, even as the parent company’s stock continues to decline.
IDG Capital Leads the Funding Round
IDG Capital led the latest financing round, with Gaorong Ventures also participating as an investor.
Major Chinese technology companies Tencent and Alibaba joined the round as strategic investors, further strengthening the financial and strategic backing behind XPENG’s robotics business.
After the transaction closes, XPENG will retain controlling ownership of its robotics division. The business will also remain consolidated within XPENG Group’s financial statements.
The company plans to use the new capital to support long-term investment in what it describes as full-stack Physical AI development.
Funding will also be used to strengthen incentive programs for senior executives and employees working on robotics and Physical AI technologies.
According to XPENG, the investment will support both hardware and software research and development, as well as the training and continuous improvement of its Physical AI models.
Additional funding will be allocated to high-quality data generation and the development of end-to-end mass-production facilities. XPENG also plans to use part of the capital to expand its robotics business outside China.
IRON Is at the Center of XPENG’s Humanoid Robot Strategy
The IRON humanoid robot is at the heart of XPENG’s Physical AI strategy.
IRON features a fully enclosed flexible lattice structure developed internally by XPENG. The design aims to combine a human-like appearance with safety and flexibility.
The humanoid robot has 76 degrees of freedom across its body, including 21 degrees of freedom in each hand. XPENG says this enables IRON to achieve a high level of dexterity, flexibility, and mobility.
XPENG has also developed the robot’s core hardware platform internally, including the chips and controllers responsible for its primary movement systems.
Separate motion modules and highly dexterous hand mechanisms are designed to handle more precise manipulation tasks.
The company is also applying manufacturing standards and quality-control processes developed for its electric vehicles to the production of humanoid robots.
By leveraging its experience in automotive manufacturing and supply-chain management, XPENG aims to produce humanoid robots at a scale similar to the automotive industry.
IRON Delivers Up to 2,250 TOPS of Computing Power
Computing power is another major component of XPENG’s Physical AI strategy.
XPENG says IRON can achieve up to 2,250 TOPS of effective computing power, supported by three internally designed Turing AI chips.
This onboard computing capability allows XPENG to run its Physical AI foundation model directly on the humanoid robot.
As a result, IRON can perform complex tasks with low inference latency while processing data locally on the device.
XPENG believes that IRON’s human-like physical design could provide an advantage when collecting behavioral data from everyday human activities.
The humanoid form may also allow IRON to interact more naturally with environments, tools, and equipment originally designed for people.
As IRON moves toward mass production, XPENG expects a data-model-application flywheel to accelerate the robot’s ability to learn new skills and perform increasingly complex tasks.
Mass Production Expected by the End of 2026
XPENG expects the IRON humanoid robot to enter mass production by the end of 2026.
The initial deployment will take place within XPENG’s own facilities, including company stores and campuses.
Following internal deployment, the company plans to expand the robot’s availability to customers.
XPENG expects to begin delivering IRON robots to customers in China and international markets in 2027.
If the company achieves these targets, XPENG could become one of the major automotive manufacturers to make a significant transition into the humanoid robotics and Physical AI industries.
Investors See XPENG’s Manufacturing Advantage
IDG Capital believes the Physical AI industry is undergoing a major transformation, moving from technological breakthroughs toward large-scale manufacturing and commercial applications.
According to the investment firm, XPENG has several important advantages, including edge AI processors, Physical AI foundation models, and complete robotic systems.
The company’s experience in electric vehicles and autonomous driving technology could also provide important technological synergies for its robotics business.
Gaorong Ventures similarly believes humanoid robots are moving beyond demonstrations of walking and dexterity toward reliable mass production and real-world commercial applications.
XPENG’s more than decade-long experience in automotive manufacturing, supply-chain management, safety, and quality control is viewed as an important advantage in developing robots for commercial use.
XPENG Wants IRON to Become Part of Everyday Life
He Xiaopeng said the strong financial support from leading global and strategic investors will help XPENG accelerate the growth of its robotics business.
The funding is also expected to strengthen the company’s ability to attract world-class talent in the Physical AI sector.
He said IRON combines a highly human-like design with advanced artificial intelligence and high standards for safety and quality.
XPENG’s ambition is for IRON to become more than a technology demonstration. The company wants the humanoid robot to become a trusted partner for people and a useful part of everyday work and life.
With more than $900 million in new funding and a $6.3 billion valuation, XPENG is demonstrating its serious commitment to the rapidly growing humanoid robotics industry.
The next major milestone will be IRON’s planned mass production at the end of 2026, followed by customer deliveries in China and international markets in 2027.
The development of XPENG IRON will be closely watched as the global Physical AI and humanoid robot industries move from experimental technology toward real-world commercial deployment.