Despite Tesla CEO Elon Musk's high-profile claims that his humanoid robot "Optimus" will be key to a future market capitalization of trillions of dollars, the reality is that China, not the United States, may be the first to bring humanoid robots to mass production. With the Beijing government listing "embedded AI" as its next technological priority, China's humanoid robot industry is expanding rapidly and is expected to enter a large-scale commercialization phase by 2026.
Tesla hasn't even gone on sale yet, but Chinese companies are already racing to mass-produce it.
Despite Elon Musk's predictions that Tesla's future market capitalization could exceed tens of trillions of dollars, a key factor being its humanoid robot Optimus, the product has yet to be officially sold to the public. Meanwhile, several Chinese companies plan to begin mass production of humanoid robots in 2026, taking the lead in commercialization.
According to Andreas Brauchle, a partner at the consulting firm Horváth, "China is ahead of the United States in the early commercialization of humanoid robots." While both countries may eventually build equally large markets, China is currently expanding at a significantly faster pace.
"Body-based AI" is included in the five-year plan, and Chinese policies are giving it full support.
The Chinese government has included humanoid robots in its "embodied artificial intelligence" development strategy and, at a central meeting in October 2025, incorporated this field intoits 15th Five-Year Plan . This signifies that resources from the central to local governments will be invested in building supply chains and large-scale production systems.
Karel Eloot, a senior partner at McKinsey, pointed out that China is actively promoting humanoid robots in order to address labor shortages, stimulate new economic growth, and strengthen its competitiveness in the global technology sector.
To address population aging and labor costs, China is accelerating its automation transformation.
Faced with declining birth rates and an aging population, China urgently needs alternative labor. Humanoid robots are seen as one solution, with potential applications ranging from factory production lines to service industries and home care.
UBTech Robotics' Walker S2 robot even has the ability to replace its own batteries, enabling it to operate around the clock. In addition, Chinese companies are actively developing more human-like features; for example, Unitree's robots can dance, and Xpeng's "Iron" series is currently undergoing second-generation development.
Intensifying Industry Competition: Chinese Companies Rush to the Technology and Capital Markets
Currently, there are over 150 humanoid robot companies in China, with several leading manufacturers rapidly expanding:
Unitree Robotics : Plans to go public with a valuation of up to $7 billion; its H2 robot can already dance.
UBTech Robotics : Listed on the Hong Kong Stock Exchange, it raised approximately US$400 million in a capital increase in November and plans to mass-produce 5,000 units in 2026 and 10,000 units in 2027.
AgiBot : This month, it announced the completion of the production of its 5,000th robot.
Xpeng Motors : Launches its second-generation humanoid robot, Iron, which is expected to enter mass production next year.
China and the US have different strengths: China excels in mass production, while the US focuses on AI research and development.
China's strengths in manufacturing and supply chain integration have put it at the forefront of reducing robot costs. Ethan Qi of Counterpoint Research points out that the depth of China's supply chain makes companies more cost-competitive, with UBTech expecting annual production costs to decrease by 20% to 30%.
However, the United States leads in AI and autonomous control technologies, focusing on vertical integration, mastering everything from core components (such as actuators) to AI software, creating safer and more efficient products, and protecting intellectual property rights.
Long-term market size: China starts first, the US and China will eventually share the market equally.
RBC Capital Markets estimates that the global humanoid robot market will reach $9 trillion by 2050, with China accounting for 60% of that. However, Horváth predicts that after 2040, the penetration rates in the consumer market in China and the United States will converge, primarily driven by large-scale adoption in the home market.
Technological and cost bottlenecks still need to be overcome.
Despite China's rapid progress, the industry as a whole still faces several bottlenecks, including:
Chip dependence : High dependence on US chips (such as Nvidia), restrictions could affect progress.
Technical challenges : The degree of freedom of robotic hands is still difficult to imitate the fine movements of humans, which limits their application scope.
AI stability : In unpredictable environments, AI decision-making capabilities remain limited.
High cost : Currently, the cost of a high-end prototype machine is between $150,000 and $500,000, and it needs to be reduced to $20,000 to $50,000 to compete with human labor.
Behind the investment boom: Chinese officials worry about a "robotics bubble".
Despite humanoid robots being viewed as a strategic technology, Chinese officials are concerned about an overheated capital market. In November, the National Development and Reform Commission (NDRC) warned of a potential investment bubble in the robotics market, citing product homogeneity and an explosive growth in the number of companies.
Horváth's Brauchle points out that many product demonstration videos and trade show performances are overly "packaged" and fall far short of actual commercial viability. This could lead to investors misjudging progress, ultimately resulting in market corrections and stagnation of innovation.
This article, "China Ahead of Tesla? Beijing Plans to Mass Produce Humanoid Robots by 2026, Fully Promoting the 'Body-Based AI' Strategy," first appeared on ABMedia .
