Morgan Stanley doubles China humanoid robot shipment forecast as commercialization accelerates
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Morgan Stanley has sharply raised its outlook for China's humanoid robotics market, saying the industry's shift from demonstration to commercial deployment has proved faster than expected.
The Wall Street bank upgraded its forecast for China's humanoid robot shipments for a second time this year on Tuesday, expecting 50,000 units to ship this year, nearly double its previous projection of 28,000. The bank had already doubled its initial January forecast of 14,000 units.
Morgan Stanley estimated China's humanoid robot market will reach $2 billion this year and grow to $15 billion by 2030. Annual shipments are forecast to reach 446,000 units by then. The forecast includes only external sales, excluding those produced for prototypes, pre-order trials, or internal use.
"Commercial verification, policy support, and supply-chain feedback point to faster humanoid adoption in China," Sheng Zhong, equity analyst at Morgan Stanley, said in a note Tuesday.
China has accelerated its push to dominate the industry, with a growing roster of domestic manufacturers racing to scale production and deploy robots in real-world settings such as factories, convenience stores and restaurants.
Beijing has also made developing “embodied AI” — artificial intelligence embedded in physical systems such as robots — a priority for the coming five years, directing local governments to subsidize startups with land and office space while ordering banks to extend favorable lending terms.
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Last year, about 13,000 humanoids were shipped worldwide, according to research firm Omdia. Chinese companies dominated the top five positions by shipments, while American rival Figure AI ranked seventh, and Tesla was ninth. Tesla CEO Elon Musk said earlier this year that the company's Optimus humanoid robot wouldn't start sales to the public until the end of 2027.
Humanoid robotics could become the "next big frontier" for investors eyeing China's rapid tech development, said Joe Ngai, senior partner and chairman of McKinsey Greater China.
"When you walk outside [in China], you see all these startups and more advanced companies, all these robots dancing — but robotics usage on the industrial side is often a below-the-radar story," Ngai told CNBC's Elaine Yu on Wednesday on the sidelines of the World Economic Forum's Annual Meeting in the city of Dalian.
"If you go to any Chinese factory right now, there's more automation and robotics that's been deployed than anywhere else in the world," Ngai added.
Morgan Stanley's supply chain field research also pointed to faster commercialization, citing factory and logistics settings, as well as further rollouts in unmanned retail stores and interactive commercial services.
The bank named Shanghai-listed Leaderdrive as a major beneficiary of the rise in humanoids, raising its 12-month target price to 464 yuan ($68) from 269 yuan. The Suzhou-headquartered company supplies precision robotic components to domestic humanoid makers such as Ubtech and Galbot.
Leaderdrive could hold a 40% global market share this year and 25% over the longer term, Zhong said, supported by robust shipments and its strong customer exposure.
Chinese robotic firms are also increasingly eyeing overseas expansion.
Seer Intelligent, a Shanghai-based robotics company that began trading in Hong Kong on Wednesday, has expanded beyond China since 2021, with overseas revenue from more than 65 countries contributing 18% of its total sales last year, according to Jonathan Fan, the company's chief operating officer.
But geopolitical uncertainty and simmering trade tensions remain the most significant headwind, Fan told CNBC's Emily Chan on Monday. He said the company was focusing on geographic diversification to reduce reliance on a single market and strict compliance with local regulations in each market it operates.
Policymakers in Washington have grown alarmed at China's progress in artificial intelligence and the risks of growing dependence on Chinese technology in recent years.
"If Washington treats the contest solely as a race to hit new capability benchmarks, it could lead in invention but fall behind in influencing where and how AI is used worldwide," Suzanne Nossel, Lester Crown senior fellow for U.S. foreign policy and international order at the Chicago Council on Global Affairs, said in an opinion piece published on Foreign Policy this week.
"A sales campaign for the U.S. AI stack will not jump-start adoption fast enough to keep pace with China," she noted.
— CNBC's Evelyn Cheng contributed to this report.
