*

Nearly 30 Chinese companies showed off models in Beijing

this

week

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China has called for mass production of humanoid robots by

2025

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Tesla plans to deploy 1,000 Optimus robots in factories

next

year

By Qiaoyi Li and Kevin Krolicki

BEIJING, Aug 23 (Reuters) - China dominates the market

for electric vehicles. Now it's chasing Tesla in the

race to build battery-powered humanoids expected to replace

human workers building EVs on assembly lines.

At the World Robot Conference this week in Beijing, over two

dozen Chinese companies showed off humanoid robots designed to

work in factories and warehouses, with even more displaying the

made-in-China precision parts needed to build them.

China's push into the emerging industry draws from the

formula behind its initial EV drive more than a decade ago:

government support, ruthless price competition from a wide field

of new entrants and a deep supply chain.

"China's humanoid robot industry demonstrates clear

advantages in supply-chain integration (and) mass production

capabilities," said Arjen Rao, analyst at China-based LeadLeo

Research Institute.

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 $1.4 billion state-backed

fund for robotics in January, while Shanghai announced in July

plans to set up a $1.4 billion humanoid industry fund.

The robots on display this week draw from some of the same

domestic suppliers that rode the EV wave, including battery and

sensor manufacturers.

Goldman Sachs forecast in January the annual global market

for humanoid robots would reach $38 billion by 2035, with nearly

1.4 million shipments for consumer and industrial applications.

It estimated the cost of materials to build them had fallen to

about $150,000 each in 2023, excluding research and development

costs.

"There is big room to squeeze the cost down," said Hu Debo,

CEO of Shanghai Kepler Exploration Robotics, a company he

co-founded last year inspired by Tesla's humanoid robot Optimus.

"China specialises in fast iteration and production."

Hu's company is working on its fifth version of a worker

robot to trial in factories. He expects the sales price to be

less than $30,000.

'CATFISH EFFECT' COMES TO ROBOTS

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 U.S. 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.

Tesla showed off Optimus, mannequin-like, standing in a

plexiglass box next to a Cybertruck at an exhibition alongside

the conference in Beijing this week.

Optimus was outdone by many Chinese humanoids that were

waving, walking or even shrugging, but it was still one of the

most popular exhibits and thronged with people taking photos.

"Next year there will be more than 1,000 of my compatriots

in the factory," a sign next to Optimus said.

Tesla, in a statement, reiterated it expected to move beyond

prototypes to start producing Optimus in small volumes next

year.

ROBOTS ON THE ASSEMBLY LINE

Hong Kong-listed UBTECH Robotics has also been

testing its robots in car factories. It started with Geely

and announced a deal on Thursday to test them at an

Audi plant in China.

"By next year our goal is going to mass manufacturing," said

Sotirios Stasinopoulos, UBTECH's project manager.

That would mean up to 1,000 robots working in factories, he

said. "It is the first milestone towards a large-scale

deployment."

UBTECH uses Nvidia ( NVDA ) chips in its robots but more

than 90% of components are from China.

The current generation of production robots - massive arms

capable of welding and other tasks - has been led mostly by

companies outside China, including Japan's Fanuc ( FANUF ), Swiss

engineering group ABB and Germany's Kuka, owned by Chinese home

appliance manufacturer Midea.

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."

The country last November called for mass production of

humanoid robots by 2025, but that will start on a much smaller

scale than is needed to transform EV production.

"I believe that it is likely to be at least 20 to 30 years

before humanoid robots can achieve large-scale commercial

application," said LeadLeo Research Institute's Rao.