XPeng's robot unit raises $900M at $6.3B valuation, led by IDG

Xpeng’s robotics business has raised more than $900 million at a $6.3 billion valuation in a round led by IDG Capital

The Chinese EV maker now has the cash to push its IRON humanoid to reach mass production this year.

Why is Xpeng making robots if its car business is suffering? 

The Chinese electric vehicle maker Xpeng (NYSE: XPEV) has raised over $900 million for its robotics business at a $6.3 billion valuation. The funding round was led by IDG Capital, with other major investors including Tencent and Alibaba (NYSE: BABA).

Cryptopolitan previously reported that Xpeng calls itself a “Physical AI company” that makes humanoid robots, robotaxis, and flying vehicles. The company is spinning off its robotics assets and staff into a standalone subsidiary called Dogotix. The money will help the company mass-produce its IRON humanoid robot by the end of 2026, with commercial deliveries in China and overseas markets scheduled to start in 2027.

On the other hand, Xpeng’s car business reported a net loss of 1.34 billion yuan ($199.4 million) for the second quarter of 2026. That loss is 179% larger than the same period last year. However, revenue rose 8% to 19.7 billion yuan. The company delivered 103,295 vehicles in the second quarter, up 64.8% from the first quarter.

Early units of the IRON humanoid robot will work in Xpeng’s own showrooms and factories in order to let the company test and improve the robots without needing outside customers first. 

The IRON robot has 76 degrees of freedom across its body. Each hand has 21 degrees of freedom, giving it near-human movement. It runs on three of Xpeng’s own Turing AI chips that provide a combined 2,250 TOPS of computing power. The company also says IRON can perform complex tasks on its own without remote control from a human. 

Xpeng believes it has a manufacturing advantage over competitors like Tesla’s Optimus robot because it can use the supply chains and factories it already built for its cars. Notably, Tesla has yet to sell any of its Optimus robots. 

Xpeng wants to make over 1,000 robots per month at first, but its long-term goal is to produce 1 million robots per year by 2030. 

What companies invested in XPeng?

Of the $900 million raised by XPeng, $600 million came from outside investors, while $200 million was taken from an XPeng subsidiary. Xpeng CEO He Xiaopeng and co-president Brian Gu provided the last $100 million. Xpeng called the round the largest single private funding round ever for a Chinese robotics maker. 

The company will own about 82% of the new subsidiary, but after all warrants and incentives are used, that stake could drop to 68.41%. 

The deal includes a seven-year timeline in which Dogotix must complete a qualified IPO or risk investors forcing a buyback. In the event of that, they would get back their original investment plus 8% annual compound interest. Or they could get 120% of what they paid, whichever is higher. 

Notably, none of the closing conditions have been met yet, so the deal could still fall through, and despite the impressive funding round, XPEV traded down 2.38% at $11.90 in pre-market activity.

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