Xpeng Inc (NYSE:XPEV), the Chinese electric vehicle maker, is raising more than $900 million for its robotics business, valuing the unit at more than $6.3 billion.
The EV maker claims this is the largest single-round private financing ever recorded in China's embodied AI industry.
The funding round is led by IDG Capital and includes Gaorong Ventures, while Alibaba and Tencent are participating as strategic investors, giving the unit substantial backing from China's technology industry.
Bloomberg reported that XPeng itself will invest $200 million in the robotics business, while external investors will provide $600 million and senior executives will contribute $100 million.
XPeng described the transaction as the largest single-round private capital raise to date in China's embodied artificial intelligence industry, which covers systems that use artificial intelligence to perceive and act in the physical world.
The robotics business will use the proceeds for hardware and software development, physical artificial intelligence model training, high-quality data generation and the construction of facilities for mass production.
The funding will also support international expansion as XPeng seeks to build a robotics business alongside its electric vehicle operations and apply expertise in sensors, software, batteries and supply chains.
XPeng plans to begin mass production of its IRON humanoid robot by the end of 2026, with initial deployments at its stores and industrial campuses.
Broader commercial launches and deliveries in China and overseas markets are planned for 2027, putting the robotics unit on a relatively short timetable to move from development into commercial operations.
Chief Executive He Xiaopeng will personally lead the robotics business as the company increases investment in humanoid robots and other physical artificial intelligence applications.
The financing comes as XPeng reported second-quarter revenue of 19.74 billion yuan, about $2.91 billion, below analyst expectations, while its net loss widened to 1.34 billion yuan, or about $199 million.
XPeng's shares fell sharply Monday as investors focused on the earnings miss and outlook, showing that the robotics valuation has yet to offset concerns about the company's core electric vehicle business.
