China, already a powerhouse in the electric vehicle (EV) industry, is now setting its sights on humanoid robots, aiming to surpass Tesla (TSLA.O) in the race to automate assembly lines.
At the World Robot Conference in Beijing this week, more than two dozen Chinese firms showcased their latest humanoid robots, designed to replace human workers in factories and warehouses.
China's burgeoning humanoid robot sector mirrors the strategy that fueled its earlier EV success: leveraging government support, aggressive pricing, and a robust supply chain.
"China's humanoid robot industry exhibits significant strengths in supply-chain efficiency and mass production," noted Arjen Rao, analyst at LeadLeo Research Institute.
President Xi Jinping's policy to foster "new productive forces" in technology underpins this push. Beijing recently introduced a $1.4 billion state-backed robotics fund, while Shanghai unveiled a similar initiative in July, also valued at $1.4 billion.
The robots on display utilised domestic suppliers that had previously powered China's EV boom, including battery and sensor manufacturers. Goldman Sachs predicts that the global market for humanoid robots will hit $38 billion by 2035, with 1.4 million units shipped annually. The cost of materials for these robots has already dropped to about $150,000 each, excluding R&D.
Hu Debo, CEO of Shanghai Kepler Exploration Robotics, aims to drive costs down further. His company, inspired by Tesla's Optimus, is working on its fifth prototype and expects the final product to be priced below $30,000.
Tesla's entry into the humanoid robot market with Optimus, first introduced in 2021, has had a "catfish effect" on the industry, similar to its impact on the EV sector. While Tesla has a head start in AI, China's manufacturing capabilities could significantly lower production costs.
At the Beijing conference, Tesla's Optimus was a popular exhibit, although it was outshone by more advanced Chinese robots performing tasks like waving and walking. Despite the competition, Tesla remains optimistic about transitioning from prototypes to small-scale production next year.
UBTECH Robotics, listed in Hong Kong, is already testing its robots in car factories, including a new deal with Audi in China. The company's goal is to achieve mass production by next year, potentially deploying up to 1,000 robots in factories.
Although China is the global leader in factory-installed production robots, the widespread use of humanoid robots in EV production is still years away. According to LeadLeo Research Institute, large-scale commercial applications might take 20 to 30 years.
