Chinese EV Makers Shift to Humanoid Robots as Car Market Slows

Counterpoint Research associate director Kevin Li said the move is part of a bid to reshape capital valuation narratives. He added that automakers also want to boost investors' perception that they are technology companies and establish a second growth curve.

Xpeng shares have tumbled more than 45% this year, making it the worst performer among major EV players, while BYD shares are down more than 13% as sales have slumped. According to Counterpoint, Chinese automakers accounted for more than half of the nearly 20 car companies globally that, as of August, had entered the humanoid robotics sector through in-house development, investment or incubation. The venture arm of EV company Nio has also invested in robotics startups LimX Dynamics and Acorn Robot, according to PitchBook data.

The diversification comes as slowing growth and weakening profitability pressure China's EV makers. The average profit margin in China's vehicle manufacturing sector stood at 1.5% in the first half of 2026, according to China Association of Automobile Manufacturers data cited by Counterpoint. Xiaomi, Li Auto and Geely are also among EV makers making moves into robotics, although their strategies differ.

Fitch Ratings director Jing Yang said that “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.” She said this allows them to pursue alternative growth drivers, achieve economies of scale for shared advanced technologies, and potentially improve profitability in the medium term.

Investors are not yet buying the story, the report said. Xpeng shares fell after the company raised $900 million for its robotics business last month, which it described as the largest single round in China's embodied AI industry. The raise valued Xpeng's robotics unit at more than $6.3 billion, on par with the $6.5 billion estimated value for its EV business, according to Citi.

Jefferies senior research analyst Xiaoyi Lei said Chinese automakers have advantages in the robotics push, including reuse of the supply chain. Xpeng, for example, can use 85% of its motors, chips and smart driving software for humanoids, she said. Robots can then be deployed immediately in automakers' stores and factories rather than waiting for consumer demand. Xpeng plans to begin mass production of its robots by the end of this year, starting in its own stores and business venues, and will launch them to the broader market in China and overseas next year.

Lei said Chinese automakers already know how to build reliable products at scale, and producing thousands of robots is what they do every day. With in-house deployment, it is easier and cheaper to collect data critical for humanoid commercialization. “Chinese players are the ones actually pushing it into daily use,” she said.

Xiaomi, which launched its first electric car in 2024, began testing humanoid robots at its factory this year. Counterpoint's Li said BYD could also deploy robots in its factories, but over the medium-to-long term Geely and Xpeng could better capture the benefits of diversification beyond cars, citing Xpeng's greater emphasis on its physical AI strategy.

Whether humanoid robots can generate demand beyond automakers' own operations remains open. Lei said Jefferies has yet to see firm external orders from the automakers it covers or clear guidance on external customers and robotics revenue for next year.

Leading humanoid company Unitree's shares rocketed on their Shanghai debut last month, but declined in 12 of the 16 sessions since listing. Founder Wang Xingxing has cautioned that commercialization could take years, with the humanoid sector's “ChatGPT” moment likely a decade away.