Xpeng shares came under pressure on Monday after the Chinese electric vehicle maker reported weaker-than-expected second-quarter results, but its newly funded robotics business was the standout. The company’s robotics division raised more than $900 million in its first funding round, giving the unit a post-money valuation above $6.3 billion. The round was led by IDG Capital, with Gaorong Ventures participating and Alibaba and Tencent joining as strategic investors. Xpeng says this is the largest single-round private financing deal recorded in China’s embodied-AI industry.
The proceeds will support humanoid-robot hardware and software development, Physical AI model training, data generation, manufacturing infrastructure, and international commercialization. Xpeng plans to produce 1,000 IRON humanoid robots per month by the end of 2026, with initial deployments in retail and industrial locations and broader commercial sales in 2027. The IRON robot has 76 degrees of freedom across its body, including 21 in each hand, and runs on three Xpeng Turing AI chips with 2,250 TOPS of combined computing power. The company expects its existing auto supply chain and factories to provide a manufacturing advantage over competitors such as Tesla’s Optimus.
Despite the robotics financing, Xpeng’s core EV business disappointed investors. Vehicle deliveries reached 103,295 units in Q2, up 64.8% sequentially but only 0.1% year over year. Vehicle-sales revenue rose just 1% year over year to RMB17.05 billion. Vehicle margin fell to 12.1% from 14.3% a year earlier. Net loss widened to RMB1.34 billion from RMB480 million, and adjusted loss per ADS was RMB1.29 versus a FactSet estimate of RMB0.91. Q3 revenue guidance of RMB21.7 billion to RMB23.4 billion was well below the RMB26.69 billion consensus, with about 118,000 deliveries expected.
The funding round includes roughly $600 million from outside investors, $200 million from an Xpeng subsidiary, and $100 million from CEO He Xiaopeng and co-president Brian Gu. Xpeng will own about 82% of the robotics subsidiary Dogotix, potentially declining to 68.41% after warrants and incentives. The deal includes a seven-year timeline for a qualified IPO or a buyback; investors could receive their original investment plus 8% annual compound interest or 120% of what they paid, whichever is higher. Xpeng says none of the closing conditions have been met yet, so the deal could still fall through. In pre-market activity, XPEV traded down 2.38% at $11.90.
