Multiple Automakers and Autonomous Driving Firms Enter Embodied AI Arena, Sparking Industry Debate on Timing and Challenges

Multiple automakers and autonomous driving companies are accelerating their moves into the embodied intelligence sector. Companies including Chery, XPeng, SAIC Motor, QCraft, and Momenta have successively entered this emerging field. In the first half of 2026, total funding in China’s embodied intelligence sector reached RMB 93.5 billion, a fivefold year-over-year increase, with 322 financing deals recorded—up 137% year-over-year—and average deal sizes growing significantly. Industry observers hold two contrasting views on automakers’ entry into embodied intelligence. One camp argues that the current period represents a critical window to seize early-mover advantages, accumulate experience, and explore transformation pathways. The other cautions that the technology remains in its infancy, requiring substantial investment and offering a long commercialization timeline, which could further burden companies financially. Automakers do possess certain inherent advantages in this domain: their accumulated expertise in vehicle intelligence overlaps significantly with embodied intelligence, allowing partial reuse of core algorithms and supply chains. Their automotive-grade mass-production systems can help reduce hardware costs and enhance product reliability. Moreover, automakers typically have strong cash flows, access to computing resources, and cross-disciplinary teams—assets that can help them withstand early-stage commercialization pressures and facilitate product deployment through proprietary application scenarios. However, significant weaknesses remain. Automakers generally lack sufficient in-house capabilities in software and core components and do not yet possess native foundation models. They remain heavily reliant on overseas suppliers for high-end sensors and other critical parts. Additionally, they have not yet established micrometer-level precision manufacturing and control systems, exposing their supply chains to risk. Furthermore, the timeline for large-scale commercialization of embodied intelligence remains uncertain, and a considerable gap persists between laboratory achievements and real-world application requirements. Experts recommend that automakers carefully assess the timing of their entry, prioritizing factors such as technological synergy, internal scenario closure capabilities, and readiness in large-model development. During strategic planning, companies should guard against the “pseudo-in-house R&D” trap and strike a balanced approach between self-development and partnerships, as well as between short-term investments and long-term returns, based on their own capabilities, strategic objectives, and market conditions. In the long run, participation in embodied intelligence is a strategic imperative for automakers—one that must be grounded in reality, focused on building an industrial ecosystem, and aimed at deep integration between technology and market demands.