Humanoid Robots Could Cost Just $13,000 by 2035 - Here's What That Means for Global AI Race

As American tech companies race to develop humanoid robots, this momentum can further become more intense because the cost of building these artificial intelligence-based machines will witness a sharp decline in the next decade. According to Bank of American (BofA) report, the bills of materials (BOM) cost per unit could drop to as low as $13,000-$17,000 by 2030-2035.

This corresponds to an over 50% decline in the BOM cost over the next five years. As per the report, the BOM cost of a typical humanoid robot should stand at around $35,000 per unit by the end of 2025 if most of the components are made in China, the report said.

This cost estimate is based on several assumptions: the robot is designed with 16 rotary actuators and 14 linear actuators; the rotary actuators incorporate harmonic reducers; the linear ones rely on planetary roller screws; the robot features a dexterous hand with six degrees of freedom; its vision system includes both a depth camera and LiDAR; and, wherever feasible, it uses China-made components to further drive down costs.

What Are Humanoid Robots?

A humanoid robot is an artificial intelligence-powered machine which mimics a human’s behaviour and interaction. It is typically designed to replace human workforces in dull, dangerous, and unhygienic working environments. But unlike industrial robots that operate in a highly structured and uniform environment, these robots commonly work in an unstructured environment with a high level of uncertainties.

Some applications of humanoid robots may include security, healthcare and warehouse management. They can also be used in household applications such as taking care of the elderly or doing housework.

But compared to other types of robots, humanoid robots usually face more complex working environments, which require sophisticated AI functionality to support their sensing, motion control and interactions with humans.

Where Can These Robots Be Used?

These robots can replace 20% of the workforce in the industrial sector, and 50% in the service sector, the report said. In short, a humanoid robot can replace 2.5 or 1.5 workers in the industrial or service industry, it added.

The penetration of humanoid robots is projected to reach approximately 0.7 units per household, translating to around 0.3 units per capita. This would place humanoid robots slightly ahead of passenger vehicles, which currently stand at 0.2 units per capita, though still below smartphones which have a penetration rate of 0.9 units per capita.

BofA asserted that the end-use distribution of these robots at this stage is expected to be dominated by the service sector (65%), followed by household (32%), and industrial applications (3%). And the total units in ownership for humanoid robots are expected to reach three billion units globally by 2060, it added.

What’s Holding Back Its Mass Adoption?

Despite the scope of growth in future, the firm believes that humanoid robot companies need to overcome a series of key bottlenecks, including a strong AI system powered by LLM (large language models) that enables real-time interactions with humans, a robust motion control system that supports complex motions, sufficient real-world data to train the AI algorithm, the deployment of computing power on the edge side, and optimizing product design to make robots more suitable for mass production with lower costs.

BofA noted that some parts of humanoid robots require high-precision grinding tools for mass production, which are still dominated by a few European and Japanese companies. Hence, the availability of high-end machine tools could potentially hinder the capacity expansion of humanoid robot components and impact the ramp-up trajectory of such robots.

However, the firm stated that the availability of critical materials, such as high-performance alloy steel and neodymium (NdFeB) magnets, will not become a bottleneck in the near term.

Who Is Leading the Humanoid Robots Race?

It’s difficult to conclude that who is leading the humanoid robots race because China and the United States have been advancing parallel. In America, chip maker Nvidia has already the Isaac GR00T N1 --- the world’s first open humanoid robot foundation model --- and Star Wars-inspired AI robot named Blue. Adding to this, billionaire Elon Musk also announced his plans to produce 5,000 such robots this year under Tesla’s humanoid robot project called ‘Optimus’.

On the other hand, in China, Hangzhou-based Unitree Robotics has already sold two humanoid robots to consumers on the e-commerce platform JD.com, according to CNBC reports. Shanghai-based robotics start-up Agibot is also aimed at producing 5,000 robots this year.

China’s humanoid robots can even dance, spin, and pull off roundhouse kicks. Yes, it’s true! A few days ago, several robots joined human participants in a half-marathon in Beijing.

Some experts, as quoted by CNBC, believe that China has the potential to disrupt the humanoid robotics space, just like it did in the EV industry when BYD began outpacing Tesla’s growth. After all, China aims to become the world leader in humanoid robots by 2027.

With the humanoid robots race intensifying each day, the next decade is poised to be transformative. But how? BofA predicts that humanoid robots can see strong shipment growth in the coming decade due to rising end-demand caused by aging populations, persistent labour shortages, and rapid advances in AI.

To conclude, the firm projects a steep growth trajectory --- estimating shipments of 18,000 units in 2025, scaling up to one million by 2030. This reflects ont only strong market potential but also a high-stakes technological race among global powers.

While countries like China and the US push to lead in innovation, the path to dominance will likely hinge on who can most effectively balance advanced functionality, affordability, and large-scale deployment.