Tesla Isn’t the Only Robot Game In Town. This Company Aims to Compete

Dow Jones02-09 08:30

Tesla is the most valuable car company on the planet, which naturally invites some competition.

Chinese electric vehicle maker XPeng is taking a few pages from the Tesla playbook, first with self-driving cars and now with robots.

In early November, XPeng announced plans to launch three AI-trained robo-taxi models in 2026. Tesla launched an AI-trained robo-taxi service in Austin, Texas, in June.

Then, XPeng management said they plan to start “targeted mass production” of its humanoid robots. Tesla has been talking about robots for years. In January, Tesla announced it would cease production of its high-price, low-volume Model S and X vehicles and convert that capacity into a robot production line.

Tesla’s humanoid robot is called Optimus. XPeng’s robot is called Iron.

“We expect Xpeng to deliver 1,000 units of humanoid robots in 4Q26E with blended average selling price of [about $175,000] and gross profit margin of 35%,” wrote Citi analyst Jeff Chung on Thursday.

Chung expects 6,000 robots sold in 2027 and then 12,000 in 2028. He currently values XPeng’s robot business at about $1.4 billion.

That’s a far cry from Tesla’s current valuation of about $1.4 trillion, though what portion of that is robot-related is hard to say. What is easier to say is that U.S. investors view Tesla as a leader in “physical AI,” or AI applications that interact with the real world.

Overall, XPeng has a market value of about $17 billion, or close to 1.4 times estimated 2026 sales. Tesla trades for closer to 15 times estimated sales.

There is no guarantee that the valuation gap will close. Still, investors should pay attention to AI developments at other companies besides Tesla.

Chung, for his part, rates XPeng stock a Buy with a $27.60 target price. Shares closed at $17.72 on Friday.

Overall, 82% of analysts covering XPeng stock rate the shares a Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%. The average analystprice targetfor XPeng stock is about $27 a share.

Coming into Monday trading, XPeng stock was up 5% over the past 12 months.

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