Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
An engineer debugs robots at the factory of AgiBot, a leading robotics company specializing in embedded intelligence, on December 8, 2025 in Shanghai, China. (Photo by Tang Yanjun/China News Service/VCG via Getty Images)
Tang Yanjun | Chinese Press Service | Chinese Press Service | Getty Images
Billionaire Elon Musk put humanoid robots in the spotlight this year, by positioning them as in the center of Teslavaluation, which, according to him, could reaches tens of billions of dollars. But Tesla has yet to sell its flagship humanoid robot Optimus.
Instead, it is likely that many Chinese companies will leapfrog Tesla and begin ramping up robot production in 2026, as Beijing puts the technology at the center of its strategic plans.
“China currently leads the United States in the early commercialization of humanoid robots,” Andreas Brauchle, a partner at consulting firm Horváth, told CNBC by email. “While both countries are expected to build markets of similar size over time, China is growing faster in this initial phase.”
Humanoid robots are designed to be shaped and move like a human. Artificial intelligence algorithms power their capabilities with complex hardware like semiconductors. Proponents say they could be used in a variety of settings, from factories to hospitality and even the home.
Beijing makes robots a priority
In recent years, China has made robotics a key focus of its technology strategy, unveiling plans to create supply chains and mass production of machines.
Chinese President Xi Jinping and the country’s top leaders, known as the Central Committee, met in October and released proposals for the “15th Five-Year Plan,” a document that outlines some of Beijing’s key areas of focus in the coming years.
“Embedded artificial intelligence,” a term that refers to AI-driven hardware like robotics or driverless cars, was mentioned in the text.
For China, humanoid robots represent an opportunity to address the challenges of working in the world’s second-largest economy and advance Beijing’s quest for technological supremacy.
“China’s push to develop humanoid robotics is driven by a combination of measures to address demographic pressures, determine the next horizon for economic growth and strengthen its role in global competition,” Karel Eloot, senior partner at McKinsey & Company, told CNBC.
Birth rates in China are falling and the population is aging, leading to a reduction in the number of working people and an increase in labor costs. Robots are seen as a way to solve this problem.
Meanwhile, China is engaged in an ongoing technological race with the United States in many sectors. Robotics, considered a concrete application of AI, could become a new battlefield in 2026. Policy reported this month that Commerce Secretary Howard Lutnick met with CEOs of robotics companies to develop a plan to accelerate the industry. Washington plans to issue an executive order on robotics next year, Politico reported, citing people familiar with the matter.
The main Chinese robotics companies
“China could be the most important market for humanoids,” RBC Capital Markets said in a note this month. The bank’s analysts predict a total potential global market for humanoids of $9 trillion by 2050, with China accounting for more than 60% of that amount.
Chinese robotics companies are trying to move into mass production.
Unitree, which is prepare for an IPO which could value it at around $7 billion, is one of the most dynamic Chinese players in robotics. The company offers different robotic models, including humanoids. This year, she launched her latest model, the H2, demonstrating her dancing ability.
The Unitree robot performs in front of China Summit visitors in Pavilion 1 during the first Web Summit day of this year’s event on November 11, 2025 in Lisbon, Portugal.
Horacio Villalobos | Getty Images News | Getty Images
UBTech Robotics is another key player in China. It makes humanoid robots intended for both an industrial environment, such as a factory, and commercial applications, such as being a tour guide. UBTech’s flagship industrial model, the Walker S2, is capable of self-replacing its battery to operate 24 hours a day.
The company is listed on the Hong Kong stock exchange and this month completed a share offering to raise about $400 million to fund expansion. UBTech plans to deliver 500 industrial robots this year and increase production of its humanoid robots to 5,000 in 2026 and 10,000 in 2027, the South China Morning Post reported in November.
AgiBot is another player that this month said its 5,000th humanoid robot had rolled off the production line.
Xpeng presented its humanoid robot called “Iron” at the IAA motor show in Munich, Germany on September 8, 2025.
Arjun KharpalCNBC
China’s advantages over the United States
China’s industrial prowess and success in increasing production of other products like electric vehicles could give it an advantage in robotics, analysts say.
“The depth of China’s supply chain means companies can develop and manufacture robots with a significant cost advantage over other regions,” Ethan Qi, associate director at Counterpoint Research, told CNBC.
In fact, UBTech forecasts a reduction in production costs of 20 to 30% each year.
At the same time, various Chinese local authorities have implemented subsidy programs for companies in the robotics sector.
The United States, however, has “advantages in AI, autonomy and advanced algorithmic development,” said Brauchle de Horváth.
U.S. companies are “betting on vertical integration” — meaning owning and controlling more of the supply chain — according to McKinsey’s Eloot. This includes components such as actuators, which power a robot’s movement, as well as the AI software built into the final product.
“We believe that tighter ownership of the complete system will result in higher performance, stronger safety records and defensible intellectual property,” Eloot said.
The Chinese market for humanoid robots will initially be larger than that of the United States, but will not remain so forever.
“In the long term, both countries are expected to converge into similarly sized markets, where absolute mass market penetration is expected after 2040, driven primarily by high-volume adoption by private households,” Brauchle said.
Bottlenecks
China’s robotics industry is not without its challenges. One of the bottlenecks is restricted access to certain chips needed for robots.
“I think there is a very heavy reliance on American chips, for example Nvidia chips,” Jacqueline Du, head of China industrial technology research at Goldman Sachs, told CNBC’s “The China Connection” last month.
Charlie Dai, principal analyst at Forrester, highlighted a number of other potential obstacles, such as AI’s limitations in unpredictable operating conditions for humanoids and regulatory barriers.
“Together, these challenges slow commercialization over the next two years and require coordinated frameworks for innovation, security and policy,” Dai told CNBC.
There are also technological difficulties associated with replicating human movement of limbs such as hands and fingers – an incredibly complex task that requires being able to mimic biological functions. “Most robotic hands do not have effective degrees of freedom, which significantly limits their reach,” notes McKinsey’s Eloot.
Finally, perhaps the biggest challenge is reducing the cost of these complex machines. Eloot said product costs for current advanced humanoid prototypes range between $150,000 and $500,000 per unit. These must be between $20,000 and $50,000 per unit to “rival human labor.”
Beijing’s investment bubble worries
Although robotics is a strategic priority for China, that hasn’t stopped regulators from warning of a potentially overheating market.
In November, China’s top economic planning agency, the National Development and Reform Commission (NDRC), warned that there was a risk of a bubble forming in the humanoid robotics market. The NDRC said there are more than 150 humanoid robotics companies in China, and the number is growing, and many of them offer similar products.
In the past, there have been boom and bust cycles around technologies that Beijing has placed strategic importance on, such as electric vehicles.
An ETF that tracks Chinese robotics companies rose in 2025.
“Many believe that humanoid robots will soon surpass human-level versatility, speed and autonomy. Manufacturers are reinforcing this perception through polished demonstration videos and staged performances at trade shows that showcase capabilities that are not yet replicable in real industrial environments,” said Brauchle de Horváth.
“This gap between perception and reality increases the risk of an investment bubble.”
“A market correction could slow the momentum of innovation and commercialization,” added Forrester’s Dai.
