Published on Dec 24, 2025

The era of software-defined driving is not really old. Yet in China, it is already history. With the emergence of AI-defined driving, the third major disruption of the automotive industry has just begun.

The first wave of disruption was electrification. The second was “digitalisation,” marked by the rise of the software-defined vehicle and the first steps toward autonomous driving. Many OEMs and suppliers are still grappling with these two phases and would likely have welcomed a little bit more time. But that wish has not been granted.

With artificial intelligence, a third wave of disruption is now already underway in China, one that will once again fundamentally transform vehicles, autonomous and connected driving, and automotive production. In the absence of a better term, some talk about a wave of “smartification,” but the “era of AI-defined mobility” might be more accurate.

This new era is characterised by a rapid convergence of AI, the automobile, and robotics. This was evident, among other places, at the “2025 China Automotive Software Conference,” held from 16 to 18 December in Jiading, a district on the outskirts of Shanghai.

This year’s conference was held under the motto “Software Building a New Ecosystem – AI Enabling the Future.”

Cars are on their way to becoming the first widely deployed form of “embodied intelligence” in society, participants heard at the conference. They are evolving from functional machines into “intelligent agents,” with AI embedded across nearly all domains, the Chinese news agency Zhongxin She reported from the conference. (in Chinese).

“Today, both hardware and software shape the user experience, with software playing an increasingly dominant role. In the future, artificial intelligence will further enhance this experience,” the news agency quoted Zhou Ping, Executive Vice President of the China Europe Alumni Automotive Association.

The new influence of AI is not limited to the interface between driver and vehicle, though. From intelligent cockpits to intelligent chassis, the way cars are designed and built is changing all the way through the hardware and software stack. New AI solutions are also accelerating the rollout of autonomous driving.

At the same time, the automotive industry and robotics in China are increasingly converging, as methods of visual perception or algorithms that have proven effective in one industry are now being applied in the other.

“Through the deep integration of AI technologies into the automotive industry, embodied intelligence is becoming a central driver of the further development of intelligent vehicles,” the Jiading district government writes on its website.

The district government co-hosted the conference together with the China Association of Automobile Manufacturers (CAAM) and other partners. (in Chinese)

Several presentations noted that embodied intelligence—the ongoing fusion of AI and hardware—is rapidly becoming a defining feature of vehicles and, at the same time, a new growth driver for China’s automotive industry.

Against this backdrop, a new platform was launched at the conference to bring together OEMs, automotive suppliers, robotics companies, chipmakers, and AI firms. Somewhat unwieldy in name, it is called the “Meta-Ecosystem – Embodied Intelligence Core Capability Open Platform.”

Its founders describe it as China’s first cross-industry hub for “automotive + embodied intelligence.”

Founding members include Li Auto, Schaeffler Engineering, Volkswagen partner Horizon Robotics, Zhiyuan Robot (AgiBot), Yunmu Intelligent Manufacturing (YMBOT), RIVR, Shengji Miaosun Robotics, and ModelBest.

Together with universities and research institutes, the platform aims to promote innovation in embodied AI, the founders explained. Resources from across the automotive value chain are to be interconnected.

AI and its industrial application form the overarching framework under which these companies now intend to collaborate in Shanghai.

In China, AI is currently being integrated at the software level into intelligent cockpits, new approaches to autonomous driving, the daily work of vehicle designers, and process optimisation in automotive production.

As for the cross-industry dimension, the recent launch of XPeng’s new robot “Iron” has attracted considerable attention within China’s automotive industry. The Chinese EV startup built the robot using technologies originally developed for its intelligent vehicle functions and advanced driving systems.

The robot uses XPeng’s AI chip “Turing,” the AI-based vehicle operating system “Tianji AIOS,” and the camera-based perception system “Eagle Eye Vision.”

All of these technologies were developed for XPeng’s vehicles by the company, which was the first in China’s automotive industry to describe itself as a manufacturer of “AI-defined vehicles.”

The same architectures that enable driverless operation in XPeng’s electric cars now also control the robot’s motor functions.

“This shared technological foundation allows automotive and robotics products to jointly leverage R&D results and distribute costs,” wrote the automotive think tank Cheshi Ruijian on its WeChat channel. As a result, “one plus one becomes more than two,” the experts noted.

The robot “Iron,” developed by an automaker, is now being deployed in XPeng’s factories to support production of the P7 model. It is also already being used in battery production at CATL. (See the second article in this briefing.)

Iron is therefore not just another new robot, but proof that “intelligent driving technologies from the automotive industry can be successfully transferred to robots.”

What is now unfolding in the People’s Republic is thus far more than a gradual improvement of automotive software or factory processes through AI. Embodied intelligence is redefining the logic of automotive manufacturing itself.

Until recently, the core competencies of OEMs and suppliers lay in chassis or powertrain engineering, high-quality assembly, or vehicle software. Today, intelligent AI capabilities and the strategic formation of industrial ecosystems are becoming decisive at remarkable speed.

Automotive supply chains, long structured in largely linear fashion, are now transforming into integrated networks of hardware manufacturers, software developers, and providers of intelligent services.

The good news is that a new multi-billion-euro industry is emerging. The bad news is that companies that miss this new wave of disruption will face intense competitive pressure within just a few years.

Both cars and the automotive industry are therefore undergoing another profound transformation driven by AI. “Cars will become the first AI devices deployed at scale in the physical world,” said Chen Liming, President of Horizon Robotics, recently at the World New Energy Vehicle Congress in Haikou.

In China, the automotive industry is now becoming a “central anchor” for accelerating the further development of embodied intelligence technologies. At the same time, it is emerging as the first real test case for the successful commercialisation of AI in a mass market—and is itself being fundamentally reshaped in the process.