Chinese electric vehicle (EV) maker Xpeng has begun mass production of autonomous cabs powered by its own chips, likely to mount yet another challenge on Tesla as both companies pursue a leading position in self-driving.

Robotaxis have become the latest area where the two firms could go head-to-head, after smart EVs and humanoid robots, as the booming development of physical artificial intelligence technologies intensifies.

Guangzhou-based Xpeng said its robotaxis would have level 4 (L4) self-driving capabilities and be powered by four of its self-developed Turing AI chips.

According to SAE International, a global standards body, L4 allowed a driverless cab to navigate designated areas without requiring human intervention.

“Xpeng plans to initiate pilot robotaxi operations in the second half of this year to validate technical viability, user acceptance and the complete business model,” it said in a statement on Monday. “The company aims to achieve fully autonomous operations without [an] on-site safety officer by early 2027.”

Founded in 2014, Xpeng has long been dubbed a Tesla challenger in mainland China as it developed and assembled intelligent electric cars to take on Model 3 and Model Y vehicles.