Why car companies are banking on humanoid robots to drive sales

Chery's Aimoga division recently revealed the humanesque Mornine robot It's seven years since Honda retired Asimo but BYD, Tesla and others have rekindled the robot wars Seven years ago, almost to the month, Honda announced it would scrap its long-running Asimo humanoid robot programme. The dream of the robot butler popularised by comic books in the 1950s looked to have died with it. Since then, however, the rapid pace of development in electronics, sensors, robotics and artificial intelligence has persuaded car companies including BYD, Tesla, Hyundai, Chery and Xpeng that robots are suitably product-adjacent enough for them to spend big on producing Asimos of their own. Such is the buzz about the potential market for these machines either in the home or workplace that at least two of those car companies – Tesla and Chery - are predicting sales will outstrip those of its cars. Some of the more bullish financial analysts agree. “Over the long term, we project the market for humanoid robots to be materially larger than the global auto industry,” Morgan Stanley autos analyst and Tesla permabull Adam Jonas wrote in a recent report, in which he forecast the market would be worth $50 trillion (£38tn) by 2050 with 63 million jobs replaced. China and the US are leading the charge, with humanoid robots showing off their (still-limited) moves at both the CES technology show in Las Vegas in January and the Shanghai motor show in April. Most impressive was perhaps Chery’s Mornine from its Aimoga division – an unquestionably female robot decked out with wraparound shades and long blonde hair that could walk, hand you a drink and hold a conversation of sorts via integration with China’s cut-price AI large language model DeepSeek. Chery is launching the robot first as an “intelligent sales consultant” in brand dealerships globally, including those for Omoda and Jaecoo, and has already begun trialling it at a showroom in Malaysia. During an event held for the benefit of Chery’s global dealer network in April, Zhang Guibing, president of Chery International, touted Mornine’s abilities to help out showroom staff by answering questions on model specs and he encouraged dealers to buy one of the 220 robots Chery plans to make this year, at a discounted rate. However, the longer-range goal is to sell the robots alongside the cars. “Aimoga is the real future for the Chery company,” Zhang told the crowd “The market is huge. One assistant for living, one assistant for your job.” No price was given but robots are currently still prohibitively expensive. A study by the Bank of America put the bill of materials for a robot currently at around $35,000 (roughly £26,500). Last year, Morgan Stanley calculated that Tesla’s Optimus would cost between $50,000-$60,000 (around £37,500-£45,000) to make, while automotive supplier Sona Comstar, a big name in the actuators that robots will need, estimates between $35,000 to $50,000. That’s before factoring in all the other expenses as well as a profit margin. That price will come down, though. Tesla is hoping to sell its Optimus robot from between $20,000 and $30,000 (roughly £15,000-£22,500) by 2026, while the Bank of America estimates the bill of materials for the average humanoid robot will fall to $17,000 (about £12,750) by 2030. The drop will come from a combination of an improvement in component design, a cut in the cost of sensors, including lidar, and the economies of scale that will result from the predicted ramping up of production of something that currently isn’t built anywhere in volume. “Almost everything in Optimus is new,” said Tesla CEO Elon Musk on the company’s earnings call in April. “There's not like an existing supply chain for the motors, gearboxes, electronics, actuators, really anything in the Optimus apart from the AI for Tesla.” However, some are already dangling the prospect of lower prices. BYD, for example, announced in April a new humanoid robot butler costing from $10,000 (£7500) with deliveries promised in December. When the so-called BoYoboD is low on batteries, it’ll go and stand in the sun to recharge via solar. Meanwhile, China’s Unitree showed off the $16,000 (£12,000) G1 humanoid robot at CES. Of course, car companies have been at the forefront of robotics for years as they continue to automate more elements of vehicle production. But in general the large robots that are welding, painting and glueing on the assembly line are caged creatures programmed to perform a single task. Only recently has the idea of ‘cobots’, collaborative robots, been introduced into the factory space, where they are still fixed in place but are aware enough of their surroundings to work safely alongside human employees line-side. Humanoid robots are newer still, with Mercedes this year launching a pilot project at its Berlin facility with the aim that they will work alongside humans from around 2030. Ford has a robot dog built by Boston Dynamics (owned by Hyundai) patrolling its Kuga plant in Valencia, Spain, to sniff out oil leaks among other tasks. And BMW has started working with a Figure 02 robot to sort sheet metal parts at its Spartanburg plant in South Carolina. Cars and humanoid robots are entirely compatible in terms of development, argues He Xiaopeng, co-founder and CEO of China’s Xpeng. “If you have a very early preparation, you can definitely create a lot of synergies across different domains,” he said on the company’s earnings call in March. “For example, what we are developing right now is the level three capability for our autonomous driving vehicles. And this physical-world, AI model is definitely compatible with the humanoid robot's level three capability.” Xpeng is another car maker planning robot production in 2026 but there are hurdles in the way. “It's actually more challenging than even producing AI vehicles,” said He. According to He, the promise of all the show robots is not actually translating yet to a useful product. “A lot of our peers are actually focusing on the lower body motion capability of humanoid robots,” he said. “And I believe that is still very limiting because it's restricting themselves to the level two kind of capability, which is not enough.” Xpeng claims to have solved basic lower body capability as well as movement in the arms, mouth and also some brain capability. However, the future is still looking “very foggy”, He told investors. “It’s very hard to predict when the turning point will come technologically and commercially,” He said, adding that in terms of development, humanoid robots are roughly where EVs were 15 years ago. As with EVs, China is the key to the success of humanoid robots, as noted somewhat gloomily by Musk amid his trademark bombastic predictions on the investor call. “With respect to humanoid robots, I don't think there's any company that matches Tesla,” he said. “And then I'm a little concerned that on the leaderboard, ranks two through 10 will be Chinese companies.” The Bank of America’s prediction of a $35,000 bill of material cost by the end of this year was only achieved on its most of the components being made in China. “Currently, the [humanoid robot] supply chain is pretty much dominated out of China,” Vivek Singh, CEO of suppler Sona Comstar, told investors in April. The Indian-based company is looking to capitalise on firms wanting to diversify out of China. Tesla might be one. Musk admitted that production of the first Optimus robots was affected by the Chinese ban on the export of rare-earth materials to the US amid the trade war between the two countries. The US’s speedy negotiation of a lower tariff rate for Chinese goods was perhaps a recognition of how far China is ahead of the US on supply chain for tech-focused future products like robots. But first, these robot developers need to convince private individuals or companies that they need to spend £20,000 or more on a robot to make tea, sell cars, replace the night-time cleaning crew or whatever menial job a humanoid robot might turn out to be good at. As Singh noted: “If you have the greatest product in your lab and you can't sell a single unit, it doesn't really have any meaning.”

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