XPeng transforms its vision: from automotive to physical artificial intelligence

The Chinese automotive market, the most competitive in the world, is pushing manufacturers to reinvent themselves. XPeng is no exception. The automaker has announced a strategic shift: positioning itself as an artificial intelligence company rather than just a vehicle manufacturer. This transformation is a direct response to the price war that has eroded profit margins in the industry.

The Turing chip and the push towards AI

He Xiaopeng, founder and CEO of XPeng, emphasized during an event in Guangzhou that the company’s competitive advantage lies in integrating advanced AI capabilities with the internal “Turing” AI chip. “We don’t want to be just a company selling low-cost hardware,” He stated. “We aim to become a global technology company with strong differentiation.” This change of course reflects a broader industry trend: robotaxi and humanoid robots represent the next frontier for automakers integrating artificial intelligence into their technological ecosystems.

Robotaxi and humanoid robots: XPeng’s roadmap

The company has announced an ambitious timeline for its projects. Road tests of robotaxi will begin very soon, while mass production of humanoid robots is scheduled for the second half of 2026. These developments are not isolated: XPeng is investing heavily in developing autonomous driving systems focused on its internal AI capabilities, hiring specialized talent and allocating resources toward this direction.

Updated models and advanced software capabilities

During the Guangzhou event, He presented four updated car models, highlighting progress in software. The new systems include 3D navigation, advanced obstacle detection beyond line of sight, and improvements in autonomous driving systems. These updates demonstrate how XPeng is seeking to differentiate itself through integrated artificial intelligence rather than competing on price.

A broader industry trend

XPeng is not alone on this path. Li Auto, another Chinese automaker, began repositioning towards artificial intelligence in 2023, with the founder reporting annual investments exceeding 6 billion yuan ( approximately $859 million) in AI models, computing power, and infrastructure. Outside of automotive, interest in physical AI is also growing: global tech companies like Arm Holdings are reorganizing to create dedicated units for this sector.

Financial status and prospects

Despite competitive pressure, XPeng is determined to achieve profitability. The company reported a net loss of 380 million yuan in the third quarter, but He previously expressed expectations to break even by the end of 2025. This shift towards artificial intelligence represents a strategic bet on how to generate more sustainable margins in a saturated market.