China’s Robot Makers Race to Compete with Tesla in Developing Cost-Effective Humanoid Workers
China is ramping up its efforts to challenge Tesla in the burgeoning field of humanoid robots, aiming to replicate its success in the electric vehicle (EV) market. At the World Robot Conference held this week in Beijing, over two dozen Chinese companies showcased their latest humanoid robots, designed to automate tasks in factories and warehouses. The event highlighted China’s ambition to become a leader in this new industry, echoing the strategies that fueled its earlier EV revolution: extensive government support, aggressive price competition, and a robust supply chain.
Arjen Rao, an analyst at the LeadLeo Research Institute, pointed out that China’s humanoid robot industry benefits from strong supply-chain integration and mass production capabilities. This progress is bolstered by President Xi Jinping’s policy of fostering technological innovation through “new productive forces,” a theme prominently featured in promotional materials for the conference.
In support of this initiative, Beijing launched a $1.4 billion state-backed fund for robotics in January, and Shanghai followed with a similar $1.4 billion fund for humanoid technology in July. These investments underscore the government’s commitment to accelerating the development of advanced robotics.
The robots unveiled at the conference incorporate components from the same domestic suppliers that have fueled China’s EV success, including battery and sensor manufacturers. According to Goldman Sachs, the global market for humanoid robots is expected to reach $38 billion annually by 2035, with nearly 1.4 million units shipped for various applications. The cost of materials for these robots has decreased to about $150,000 per unit as of 2023, excluding R&D expenses.
Hu Debo, CEO of Shanghai Kepler Exploration Robotics, emphasized the potential for further cost reductions. His company, inspired by Tesla’s humanoid robot Optimus, is developing its fifth version of a worker robot, with a projected sales price of less than $30,000. “China specializes in fast iteration and production,” Hu noted, highlighting the country’s capability to rapidly advance in the robotics sector.
The “catfish effect,” a term used when a large competitor spurs faster innovation among rivals, has been observed in the robotics industry similar to what occurred with Tesla’s entry into the Chinese EV market. Tesla’s Optimus robot, unveiled in 2021, has been touted by CEO Elon Musk as potentially more impactful than the company’s vehicle business over time. This effect has motivated Chinese companies to accelerate their own robotics development to keep pace with international competitors.
As China aggressively pursues leadership in the humanoid robot market, it is setting the stage for a new era of automation that could significantly impact global manufacturing and labor dynamics.