When XPeng published its second-quarter results on August 24, the financial figures were mixed: revenue and gross margin saw slight increases, but the automotive segment's gross margin decreased, net loss grew, and the third-quarter forecast did not meet expectations.
Nevertheless, public attention was focused on another announcement that same day: XPeng's robotics business division completed its first funding round of over $900 million USD. This round marked a record private capital raise for the embodied intelligence sector in China, valuing the division at over $6.3 billion USD, equivalent to approximately 43 billion yuan.
IDG Capital led this round, with participation from Gaorong Venture Capital, while Tencent and Alibaba joined as strategic investors—representing some of the largest stated individual investments these companies have made in the field of embodied intelligence. The valuation places XPeng's robotic arm among the leading players in the broader robotics industry, second only to Unitree, but ahead of unicorns such as AgiBot and Galaxy General.
XPeng's concept is based on an assumption made by He Xiaopeng that there is an over 85% overlap between robot and automotive supply chains. This allows for the utilization of quality standards and manufacturing processes employed in the automotive industry. Furthermore, the company emphasizes its proprietary Turing AI chip, a self-developed physical AI model, and the humanoid robot IRON, which garnered attention last year due to its realistic gait.
He Xiaopeng personally headed the robotics business division as CEO in June. However, potential comes with risks. The IRON robot has not yet entered mass production, which He plans to achieve by the end of the current year. He acknowledged that creating high-end general-purpose humanoid robots is significantly more complex than developing smart cars—possibly 20 times more difficult. Partial reliance on imports remains for high-precision bearings, servomotors, and sensor chips.
Some analysts believe that this valuation represents a premium bet on the beginning of the industry in its mass production year, considering that only about 100 billion yuan in domestic embodied intelligence funding was raised in the first half of the year, rather than focusing on short-term revenue. XPeng intends to initially deploy IRON in its own stores and parks, leveraging its existing customer base and global sales network. Whether the $6.3 billion price tag is maintained will depend on the ability to ship robots in large volumes this year, their successful demonstration in real stores, and establishing cost and price points by 2027.