The Humanoid Robot Race: A $5 Trillion Opportunity Emerging Amid US-China Trade Tensions

Updated: May 03 2025 16:55

AI Summary: The humanoid robotics market is rapidly advancing, projected to become a $5 trillion opportunity by mid-century with potentially billions of units in use, driven by players like Boston Dynamics, Tesla, and Chinese firms such as Unitree. While technological hurdles like dextrous hands and AI remain, and mass commercial adoption is expected to accelerate in the coming decade, geopolitical tensions and tariffs, are significantly impacting supply chains and potentially fostering domestic production, reshaping the global competitive landscape for robot manufacturers.

The world of humanoid robotics is heating up, with major players racing to develop increasingly capable machines that could transform industries and eventually enter our homes. Recent research suggests this emerging market could become a staggering $5 trillion opportunity by mid-century. But amid the excitement, geopolitical tensions—particularly between the US and China—are creating both challenges and opportunities for robot makers on both sides of the Pacific.


Today's humanoid robots range from remote-controlled showpieces to increasingly autonomous helpers taking their first steps into industrial settings. At the recent Robotics Summit & Expo in Boston, attendees witnessed both fascinating demonstrations and serious discussions about supply chain challenges in the current trade environment.

Boston Dynamics, now owned by Hyundai, remains the undisputed leader in movement realism. Their new electric Atlas robot represents a shift from impressive demos to practical industrial applications. As Aaron Saunders, CTO of Boston Dynamics, showcased the company's latest advancements, attendees couldn't help but notice the shadow of tariffs looming over the industry.

Meanwhile, Chinese companies like Unitree are rapidly developing their own humanoids, with models like the G1 humanoid appearing at the same Boston expo. Priced at $16,000, these robots currently serve academic researchers and social media influencers but harbor ambitions for industrial applications.


Morgan Stanley estimates that the humanoid robot market could swell to $5 trillion in annual revenue by mid-century—roughly double the combined sales of the world's 20 largest automakers today. They project a billion robots could be in use by 2050, with early commercial adoption accelerating in the 2030s.


Bank of America's research paints a similar picture, suggesting mass adoption for commercial use will begin as early as 2028. Annual shipments could reach 1 million by 2030, with production costs potentially dropping to just $17,000 per unit. By 2060, BofA forecasts an astonishing three billion humanoid robots in global use, with the majority (about two billion) serving in households.




President Trump's far-reaching global tariffs, particularly those targeting China, have created significant challenges for robot developers. A humanoid robot's complex anatomy—motors, actuators, computers, sensors, semiconductors, batteries, and rare earth magnets—makes it particularly vulnerable to global trade disputes.

Tesla CEO Elon Musk recently warned investors that China's countermeasures restricting shipments of rare earth magnets would delay Tesla's development of its Optimus humanoid robots. The tariff situation has become the "No. 1 topic" discussed in hallways and at water coolers throughout the robotics industry, according to Robotics Summit organizer Steve Crowe.

For Chinese manufacturers like Unitree, the impact is severe. Trump's current tariffs totaling 145% on China would raise the cost of Unitree's G1 robot to American buyers from $16,000 to roughly $40,000—a significant competitive disadvantage.

While creating supply chain complications, the trade tensions might accelerate domestic robotics development in the US. Pras Velagapudi, CTO at Oregon-based Agility Robotics, noted: "It's added some inconveniences to our own supply chain. But it's also opened up opportunities."

Al Makke, a director of engineering for Schaeffler's chassis systems, suggested tariffs could push many companies toward onshoring production in the US. "And if that does happen, then local companies have to deal with high labor costs and a shortage of labor and so automation gets pushed further," Makke said. "And one of those faces of automation is humanoids."

This might create a favorable environment for US-based humanoid manufacturers like Agility Robotics, whose humanoid robot Digit is already being deployed at a US plant run by German manufacturer Schaeffler.


Several companies are positioned to benefit from the humanoid robot revolution:

• Boston Dynamics (Hyundai): The leader in movement realism is finally entering its commercial era with Atlas, Spot, and Stretch robots.
• Tesla: Named by Morgan Stanley as a top potential winner due to its full-stack integration of hardware, software, and AI with its Optimus project.
• Nvidia and Google: Major players in AI foundation models for robotics, with Nvidia's Isaac platform and Google DeepMind's Gemini Robotics.
• Microsoft, Amazon, and Meta: Key "robot brain" developers.
• Figure AI: An emerging startup reportedly in talks with UPS to implement humanoid robots in logistics operations.
• Component makers: Harmonic Drive Systems, Nabtesco, Nidec Corp, and Keyence in Japan; Rockwell Automation and TE Connectivity in the US.

Our first customer use case took 12 months, our second customer use case took just 30 days

Helix learned high-rate logistics with a single neural network

On Sunday, we successfully validated this on-site at the customer pic.twitter.com/ev5OeSEhly

— Figure (@Figure_robot) February 26, 2025

Chinese companies are also making significant strides. Beyond Unitree, Chinese carmaker Chery has developed its AiMOGA humanoid robot, which can understand human speech through integration with DeepSeek's AI models and respond in 10 languages. Chery has already deployed these robots as sales staff in its Malaysian showrooms.




Despite rapid progress, humanoid robots face significant technical hurdles before mass adoption:

• Stronger AI to enable real-time interaction with humans
• Better motion control systems to support complex movements
• More real-world data to train AI systems
• Improved sensory systems for accurate environmental information
• More computing power on the edge (onboard rather than in the cloud)
• Optimal designs to support mass production

One of the biggest challenges: dextrous hands. Nearly 20% of a robot's cost is in the hands alone. According to Sanctuary AI CEO Geordie Rose, more than half the complexity of a humanoid robot body is in the hands.


After decades of impressive demonstrations but limited commercial applications, Boston Dynamics appears to be entering a new era under Hyundai's ownership. The company plans its first proof-of-concept for Atlas at Hyundai's Metaplant in Savannah, Georgia, later this year.

David Robert, director of human-robot interaction at Boston Dynamics, explained their evolution: "We've been at it for more than 30 years... Our robots are designed to do real work in the real world, and with thousands of robots deployed on customer sites today, we are setting the standard for mobile robotics."

The company's quadruped robot, Spot, is already deployed in various industries for remote inspections and monitoring, while their mobile case-handling robot, Stretch, is used by companies like DHL, Otto Group, H&M, and Gap for warehouse automation.


Morgan Stanley expects robot prices to fall significantly. In high-income countries, the average selling price is projected to drop from $200,000 in 2024 to $50,000 by 2050. Lower-cost supply chains, especially in China, could bring prices down to $15,000 in developing markets.

Bank of America estimates that manufacturers will ship 18,000 humanoid robot units this year (2025), potentially reaching 10 million units globally per year by 2030. The projected timeline for mass adoption:

• 2025-2027: Limited commercial deployment
• 2028-2034: First mass commercialization period (industrial use)
• 2035 onwards: Second mass adoption period (home and general use)

The humanoid robot race is accelerating, with both technological advancement and geopolitical tensions shaping its trajectory. The potential $5 trillion market represents one of the most significant technological and economic transformations on the horizon. For investors, manufacturers, and consumers alike, the coming decade will be crucial in determining which companies and countries emerge as leaders in this new robotic era.

Research Report: Bank of America Humanoid robots 101