The global market for humanoid robots could reach $38 billion by 2035
Will robots become the next smartphones?
The worldwide market for humanoid robots is forecast to be bigger than analysts in Goldman Sachs Research expected even a year ago. The prospects for machines that help with everything from folding laundry to handling hazardous waste have improved as progress in artificial intelligence accelerates and investment in the sector grows faster than anticipated.
The total addressable market for humanoid robots is projected to reach $38 billion by 2035, up more than sixfold from a previous projection of $6 billion, Goldman Sachs Research analyst Jacqueline Du, head of China Industrial Technology research, writes in the report. Their estimate for robot shipments increased fourfold, to 1.4 million units, over the same time frame, with a much faster path to profitability on a 40% reduction in the cost of materials.
“AI progress surprised us the most,” the team writes in the report, referring to advances such as robotic large language models (LLMs) — a key reason for the forecast change. Goldman Sachs Research points out that there’s been significant progress in end-to-end AI, through which models can train themselves, removing the need for a human engineer to code everything by hand. That’s speeding up robot development, allowing these devices to do more tasks and adapt to new situations (such as working outside of factories) more quickly.
Robot components may become more affordable
There are signs that robot components, from high-precision gears to actuators, could also cost less than previously expected, leading to faster commercialization. The manufacturing cost of humanoid robots has dropped — from a range that ran between an estimated $50,000 (for lower-end models) and $250,000 (for state-of-the art versions) per unit last year, to a range of between $30,000 and $150,000 now. Where our analysts had expected a decline of 15-20% per annum, the cost declined 40%.
That’s mainly because cheaper components are now available, there are more supply chain options, and designs and manufacturing techniques have improved. In turn, this could speed up the timeline to factory applications by a year, and to consumer applications by two to four years, compared with Goldman Sachs Research’s prior estimates.
“We continue to expect further cost reduction in the coming years,” Goldman Sachs Research writes in the report.
The team’s base case is for more than 250,000 humanoid robot shipments in 2030, almost all of which would be for industrial use. Our analysts’ base case is for consumer robot sales to ramp up quickly over the next decade, exceeding a million units annually in just over a decade.
Which countries are most advanced in humanoid robots?
Geographically, no one country or region appears to be completely dominant in this emerging sector. Some Western companies likely have the most sophisticated AI software models, while Asia will probably be the manufacturing hub for humanoid components, because of the wide supply chain base and lower manufacturing costs.
Another reason Goldman Sachs Research is more optimistic about the sector is that more players are pouring resources into humanoids, Li says. The Chinese government started a robot fund to support research and development, and publicly listed component makers are recruiting staff and devoting capital and human resources into related areas.
There are signs that most of the hardware for humanoid robots is already available, or at least close to maturity. Robot components like cameras, motors, force sensors, transmission gears for movement, and batteries are mostly ready for commercial purposes, according to Goldman Sachs Research.
General purpose robots still face some barriers
That’s not to say that all hurdles have been overcome. Some components, for instance, need high-precision grinding machines that are limited in number, which makes it difficult to ramp up production. Costs for some components are still high because of limited industrial capacity or long manufacturing cycle times.
And there are still significant bottlenecks in the development of AI and software for robot manipulation (such as grasping objects) and interaction (taking voice commands from a person without training). While Goldman Sachs Research’s base case is that these remaining barriers for a mass-produced, general-purpose humanoid robot will eventually be overcome, the viability of such machines hasn’t been proven yet.
Using the technology available today, Goldman Sachs Research forecasts significant demand for humanoid robots in structured environments like manufacturing. That could include use cases such as electric vehicle assembly and component sorting. Industry research indicates that about 70% of manufacturing in China is already done by machinery and automation, while only 20% is handled by manual labor and 10% by management. Since humanoids are more flexible and capable of adapting to complex terrain, our analysts believe they can grow the market for industrial automation.
Humanoids are particularly appealing for tasks that are "dangerous, dirty, and dull," Goldman Sachs Research writes. Our analysts project potential demand for robots in mining, disaster rescue, nuclear reactor maintenance, and chemicals manufacturing. Customers may be willing to pay a higher price for robots that can do dangerous jobs that people are reluctant to do. Importantly, robots could also provide labor in sectors that don’t have enough workers.
Assuming a labor substitution rate of 5-15% for car manufacturing as well as dangerous jobs like disaster rescue and nuclear reactor work, the demand for humanoid robots can potentially reach 1.1 million to 3.5 million units globally. Our analysts project the best investment opportunities for now could lie in component makers that form the supply chain.
In a “blue-sky” scenario, where innovation unfolds rapidly and demand soars, Goldman Sachs Research can envision humanoid robots becoming the next “must-have” device, not unlike smartphones or EVs. Such robots would be vital for manufacturing and dangerous work, but they would also help with elderly care and fill in for labor shortages in factories.
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