Xpeng bets on "physical AI"

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At the start of 2026, XPeng Motors’ organizational changes are more intense than in previous years.

On February 3, Wallstreetcn learned that XPeng has officially merged its Autonomous Driving Center and Smart Cockpit Center strategically into a new department named the General Intelligence Center. XPeng told Wallstreetcn: “This adjustment is true.”

Previously, the two were parallel first-level departments. After the adjustment, the former head of autonomous driving, Liu Xianming, has been appointed as head of the new center, reporting directly to Chairman and CEO He Xiaopeng.

To outsiders, this may seem like ordinary resource integration, but industry insiders see it as XPeng formally ending the dual-track research and development model of intelligent driving and intelligent cockpit of the past decade, fully switching to a single-track era driven by physical AI. This is also the direction that many car companies are pushing for now.

For a long time, the software and hardware architecture of smart cars have been divided into two key areas: intelligent driving and intelligent cockpit. In XPeng’s R&D system, the Autonomous Driving Center took charge of the “hands, feet, and eyes,” while the Smart Cockpit Center covered the “mouth and ears.” Though this division ensured professional specialization in early stages, with the popularization of end-to-end large AI models, the boundary between them is blurring.

Under the traditional distributed architecture, smart driving and smart cockpit had their own perception algorithms, computing platforms, and data links. This means data would frequently jump across departments and systems to achieve cross-domain functionality, creating technical silos brought about by organizational barriers. These not only increased R&D costs but also limited system response speeds.

But with the establishment of the General Intelligence Center, XPeng will re-organize its secondary structure around Foundation Models, Infra base layer, and platform-based delivery in concentric circles.

This means that, whether it’s the decision-making flow for autonomous driving, or voice/visual interactions in the cockpit, all will share the same AI infrastructure underneath. Some industry insiders believe: "Future intelligent agents should not distinguish between driving AI and chatting AI—they should all be super intelligent agents based on a unified understanding of the physical world."

Behind XPeng’s organizational change lies a grand blueprint for its physical AI strategy. Prior to this, He Xiaopeng has officially announced XPeng’s positioning upgrade: "An explorer of mobility in the physical AI world, a globally oriented embodied intelligence company."

Currently, XPeng plans to use the same AI technology system to drive cars, humanoid robots, and flying cars—different forms of robots—and bring them to global markets. Based on the second generation VLA large model, XPeng is building a fully self-developed physical AI system covering chips, operating systems, and intelligent hardware, providing the technology foundation for this strategy.

The synergy brought by the departmental merger will directly appear in products, with the intelligent experience shifting from function stacking to capability fusion.

For example, when the system senses the driver is fatigued, it won’t just remind them via the cockpit screen, but can link with the autonomous driving system to proactively lower speed and adjust the route. When encountering road construction, while the driving system automatically avoids, the cockpit can broadcast road info, even adjust air conditioning and music, providing a coherent smart experience.

This deep synergy is also reflected in technical reuse. Reportedly, the AI software reuse rate between XPeng’s robots and cars reaches 70%, with many key technologies such as perception systems and domain controllers being interoperable.

Li Hengguang, an analyst from Northeast Securities, believes that in the past ten years, XPeng has completed the transformation from an “emerging smart EV company” to a “globally oriented AI automotive technology company,” not simply expanding as a new energy car company but building a trinity intelligent ecosystem of car + robot + flying car around AI-defined vehicles. With dual driving forces of range extension + globalization, deep technical cooperation with Volkswagen, and significantly improved internal efficiency, XPeng is entering a turning point from being tech-led but profit-pressured to a stage driven by volume bestsellers + tech output.

Currently, XPeng’s AI-focused organizational changes are not unique—they reflect the industry-wide strategic turn in smart automotive.

Li Auto has similarly adjusted its R&D structure, splitting its original autonomous driving team and integrating it into three newly established teams of Foundation Model, Software Ontology, and Hardware Ontology. Tesla also announced a $2 billion investment in Musk’s X AI and plans to halt production of some vehicle models to shift its production lines to humanoid robot Optimus.

These moves reflect the shared strategic direction of new car makers: transforming from mere automakers to embodied intelligence companies.

The reason automakers are rushing into embodied intelligence and other hardware intelligence fields is because of supply chain advantages. Li Jingtao, an analyst at CITIC Securities, points out that the supply chain overlap between smart cars and humanoid robots is over 60%, providing a natural route to cost reduction.

The frequent organizational changes in the automotive sector are reshaping the competitive landscape for smart cars.

Currently, industry competition is upgrading from single-technology rivalry to full-stack AI system construction. While car companies used to compete on how many smart driving functions and how large the cockpit screens were, now they compete on who can truly integrate these intelligent modules into a super brain.

For automakers that rely on outsourced technology without full-stack self-development capabilities, industry reshuffling may be even fiercer. The landscape of the automotive sector continues to change.

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