China's Automakers Are Betting Big on Humanoid Robots — and Beating Tesla to Market
Chinese car companies are moving fast into humanoid robots, and one of them just secured the largest single funding round for embodied AI in China's history. Xpeng's robotics division raised over $900 million at a $6.3 billion valuation on August 24, 2026, per Xpeng's press release. That puts it ahead of Tesla's Optimus program, which remained in R&D-only; mode as recently as January 2026.
The robots
Xpeng's humanoid is called IRON. The company is targeting mass production by the end of 2026, with commercial customer deliveries planned for 2027. Founder He Xiaopeng and co-president Brian Gu personally invested around $100 million of their own money in the round — a signal of how seriously the company is taking the pivot away from low-margin car sales.
BYD, meanwhile, unveiled its own humanoid robot, Xiao Di, this month. Standing 1.61 meters tall with 31 degrees of freedom and multilingual capability, it's currently headed for BYD showrooms in China. Changan, GAC, Li Auto, SAIC, and Seres are all running parallel programs. Hyundai, Mobileye, and Rivian are also in the mix, suggesting automakers across the board now view robotics as a standalone business worth building.
The hardware advantage Chinese automakers carry is real — batteries, motors, and electronic control systems drawn directly from mature EV supply chains. The gap is on the software side, where Tesla's years of autonomous driving data give it a lead that's harder to close, as Electrek notes.
The door closing in the US
The US FCC added Chinese humanoid and quadruped robots to its Covered List on July 28, 2026, effectively blocking import authorizations for BYD's Xiao Di, Unitree, and others on national security grounds. That means Xpeng's stated goal of overseas deliveries in 2027 faces a significant regulatory wall in the American market before a single unit ships.
The ban doesn't extend to Europe, where no equivalent restriction is in place — though the EU AI Act could complicate market access for Chinese-made AI systems down the line.
Tesla's Optimus remains pre-revenue and hasn't disclosed production numbers. Its first commercial customers are still a stated target for late 2026. China's automakers, flush with EV manufacturing infrastructure and fresh capital, are no longer just chasing Tesla — they're running a parallel race with a different set of advantages.
