China leads the electric vehicle market and is now pursuing Tesla in the development of battery-powered humanoid robots anticipated to take over the roles of human workers on EV assembly lines.

During the World Robot Conference held this week in Beijing, more than twenty Chinese firms showcased humanoid robots intended for use in factories and warehouses, while numerous others exhibited the precision components manufactured in China that are essential for their construction.

China's advancement in this burgeoning sector is reminiscent of the strategy that fueled its initial electric vehicle initiative over a decade ago, characterized by strong government backing, intense price competition from a diverse array of new players, and a robust supply chain.

"China's humanoid robot industry demonstrates clear advantages in supply-chain integration (and) mass production capabilities," said Arjen Rao, analyst at China-based LeadLeo Research Institute.

The robotics initiative aligns with President Xi Jinping’s policy of fostering “new productive forces” in technology, as highlighted in the event’s brochures.

In January, the city of Beijing established a $1.4 billion government-backed fund dedicated to robotics, while Shanghai announced plans in July to create a $1.4 billion humanoid industry fund.

The robots showcased this week utilize domestic suppliers that played a significant role in the electric vehicle (EV) industry, particularly battery and sensor manufacturers.

Goldman Sachs projected in January that the global market for humanoid robots would reach $38 billion annually by 2035, with approximately 1.4 million units shipped for consumer and industrial applications. The estimated cost of materials to construct these robots had decreased to roughly $150,000 per unit in 2023, excluding research and development expenses.

"There is big room to squeeze the cost down," said Hu Debo, CEO of Shanghai Kepler Exploration Robotics, a company he co-founded last year inspired by Tesla's humanoid robot Optimus.

"China specialises in fast iteration and production."

Hu's organization is currently developing the fifth iteration of a robotic worker intended for testing in manufacturing facilities. He anticipates that the retail price will be under $30,000.

CATFISH EFFECT' COMES TO ROBOTS

When Tesla inaugurated its Shanghai factory in 2019, Chinese officials anticipated that the electric vehicle pioneer would create a "catfish effect" within China's automotive sector, introducing a formidable competitor that would compel local manufacturers to enhance their performance. According to Hu, Tesla's Optimus robot has produced a similar impact.

The U.S. automaker unveiled Optimus in 2021, with CEO Elon Musk suggesting it could ultimately prove "more significant than the vehicle business."

The company is employing an artificial intelligence strategy for Optimus that is based on its "Full Self-Driving" technology for electric vehicles.

While Chinese competitors and analysts acknowledge Tesla's early advantage in AI, they also recognize China's capacity to reduce production costs.

At a recent exhibition in Beijing, Tesla showcased Optimus, which resembled a mannequin, positioned in a plexiglass enclosure next to a Cybertruck.

Although Optimus was surpassed in performance by several Chinese humanoid robots that were waving, walking, and shrugging, it remained one of the most popular attractions, drawing large crowds eager to take photographs.

"Next year there will be more than 1,000 of my compatriots in the factory," a sign next to Optimus said.

Tesla, in an official statement, reaffirmed its anticipation of transitioning from prototypes to the commencement of Optimus production in limited quantities during the upcoming year.

ROBOTS ON THE ASSEMBLY LINE

UBTECH Robotics, listed in Hong Kong, has been conducting trials of its robots in automotive manufacturing facilities.

The company initially partnered with Geely and recently announced a collaboration to test its robots at an Audi plant in China. "Our objective for next year is to transition to mass production," stated Sotirios Stasinopoulos, the project manager at UBTECH.

This initiative could see as many as 1,000 robots operating within factories, marking a significant step towards extensive deployment. While UBTECH incorporates Nvidia chips in its robots, over 90% of the components are sourced from China.

The current generation of industrial robots, which includes large robotic arms designed for welding and various tasks, has predominantly been developed by firms outside of China, such as Japan's Fanuc, Switzerland's ABB, and Germany's Kuka, which is owned by the Chinese appliance manufacturer Midea.

According to the International Federation of Robotics, China currently leads globally in the number of factory-installed production robots, boasting more than three times the quantity found in North America.

At a recent event in Beijing, Xin Guobin, China's vice-minister for industry and information technology, remarked that his ministry has been following Xi's directives, positioning China as a significant player in the global robotics sector.

Last November, the country announced plans for the mass production of humanoid robots by 2025, although this will commence on a much smaller scale than what is required to revolutionize electric vehicle manufacturing.

Rao from the LeadLeo Research Institute stated, "I anticipate that it will take a minimum of 20 to 30 years for humanoid robots to reach widespread commercial utilization."