Chinese automakers are accelerating their forays into the burgeoning humanoid robot sector as a means of strategic diversification, leveraging existing technological expertise and manufacturing capabilities in smart vehicles amid intense competition.

Xiaomi, a high-profile relative newcomer in the smart electric vehicle sector, said on Sunday that it is working on preparing its robot, CyberOne, to work on its vehicle production lines. The consumer electronics giant unveiled the humanoid robot back in 2022.

GAC, a Chinese partner of Toyota and Honda, unveiled its humanoid robot GoMate in December, which stands and moves on wheels.

The State-owned automaker said it will start mass production of the robot's components — developed in house — in 2025, and the robots are expected to work in its vehicle assembly plants from 2026.

Li Xiang, founder and CEO of Li Auto, the first Chinese NEV startup to be profitable, said in a December interview that the company "will definitely do humanoid robots".

Analysts said automakers' entry into robotics stems from overlapping technologies between smart EVs and humanoid machines.

Also, their bulk purchases of components, many of which are from auto parts suppliers, give them cost advantages over smaller rivals.

Autonomous driving systems, a battleground for automakers, have become a treasure trove for robotics, said Chen Meng, a Beijing-based independent auto analyst.

"Sensors like lidar and cameras, AI algorithms for object recognition, and high-precision motors — all originally designed for vehicles — are now being repurposed to teach robots to 'see', 'think', and 'move'," said Chen.

NEV startup Xpeng's robot — Iron — unveiled in November, will feature in-house developed chips. The robot has hands and arms that have 15 degrees of freedom, compared to Tesla chief Elon Musk's Optimus, which has 22 degrees of freedom.

Also, entering the humanoid robot sector positions participating automakers at the forefront of a rapidly evolving industry, with potential applications across various areas, including healthcare, manufacturing and consumer services.

That offers a new growth engine, which might prove to be more powerful over time than many can imagine, for automakers that are seeing profit declines amid white-hot competition.

Musk has called Optimus a potential " $10 trillion business", dwarfing Tesla's auto revenue.

Chinese firms are equally bullish.

Xiaomi's CyberOne, which can work as a home assistant, aims to anchor its ecosystem of smart devices.

In a Sina Weibo post, He Xiaopeng, CEO of Xpeng, wrote, "Robotics is a natural extension of our smart EV ecosystem."

The total addressable market for humanoid robots worldwide is projected to reach $38 billion by 2035, up more than sixfold from a previous projection of $6 billion, Goldman Sachs Research analyst Jacqueline Du, head of China Industrial Technology research, wrote in a report.

There are short-term, instant benefits for automakers as well, said Zhang Xiang, a fellow at the Research Center of Automobile Industry Innovation of the North China University of Technology.

"It gives automakers such labels as 'innovation' and 'technology', which will help their appeal in the minds of potential car buyers and may help boost their performance in the stock market as well," said Zhang.

Following a team of humanoid robots performing at the Spring Festival Gala in early February, a number of companies in the sector have been seeing their prices surge in China's stock market.