China’s humanoid robot development threatens Tesla’s global market lead

Chinese robotics manufacturers are threatening Tesla’s market lead in the race to build humanoid robots to replace human workers.

With a dominant position in the electric vehicle market, China is using the same blueprint for their rollout including government support, ruthless price competition from a wide field of new entrants and a deep supply chain.

At the World Robot Conference this week in Beijing, over two dozen Chinese companies demonstrated humanoid robots designed to work in factories and warehouses, with even more displaying the made-in-China precision parts needed to build them.

Arjen Rao, analyst at China-based LeadLeo Research Institute said: “China’s humanoid robot industry demonstrates clear advantages in supply-chain integration [and] mass production capabilities.”

The robotics effort is backed by President Xi Jinping’s policy of developing “new productive forces” in technology – a point made in brochures for this week’s event.

The city of Beijing launched a $1.4bn state-backed fund for robotics in January, while Shanghai announced in July plans to set up a $1.4bn humanoid industry fund.

When Tesla opened its Shanghai factory in 2019, Chinese officials said they expected the EV pioneer would have a “catfish effect” on China’s industry, introducing a large competitor that would make Chinese rivals swim faster.

Tesla’s Optimus robot has had a similar effect, Hu said.

The US automaker first introduced Optimus in 2021, which CEO Elon Musk then touted as potentially “more significant than the vehicle business over time.”

Musk’s company is using an artificial intelligence approach for Optimus modelled on its “Full Self-Driving” software for EVs.

Chinese rivals and analysts say Tesla has an early lead in AI, but China has the ability to drive down the price of production.

China leads the world with factory-installed production robots, more than triple the number in North America, according to the International Federation of Robotics.

Xin Guobin, China’s vice-minister for industry and information technology, said at the opening of the Beijing event that his ministry had been implementing Xi’s guidance and had made China “an important force in the global robot industry.”