Taking a deeper look at humanoid robots

Investing.com -- The global race to develop humanoid robots is accelerating, with Macquarie analysts seeing the potential for this sector to reach a total addressable market (TAM) of $1.7 trillion by 2050, on par with today’s global light vehicle market.

With software and battery challenges expected to be resolved by the end of this decade, adoption is likely to ramp up sharply in manufacturing and beyond.

According to Macquarie, humanoid robots could initially replace 3-4 million final vehicle assembly workers in developed markets, bringing clear cost advantages.

Assuming a robot priced at $100,000 with 24/7 operation, the hourly cost is around $5.10—below the U.S. minimum wage and significantly under average labor costs in the auto industry.

As production scales, Macquarie expects hardware costs to drop to $20,000, pushing the hourly cost down to just $1.40.

“The automotive industry, with labour costs averaging $38.07/ hour in the U.S., more than three times the average $11.23 minimum wage, stands to gain significantly,” Macquarie analysts said in a recent report.

Driving this shift is the increasing labor shortage in core manufacturing hubs such as the U.S., China, Japan, and Germany. Retirement of Baby Boomers and a lack of younger replacements have left many jobs unfilled.

“Reviving manufacturing industry is a core tenet of ‘Make America Great Again,’” the brokerage notes, pointing to a key political backdrop for automation-driven reshoring.

Against this backdrop, Tesla (NASDAQ:TSLA) is positioned as a frontrunner. The company has begun testing its Optimus robot and plans to scale production beginning in 2026.

Elon Musk envisions a future with “10-30 billion humanoid robots” and expects annual production to hit 1 billion units. Macquarie sees Tesla benefiting from its self-driving technology, mature EV supply chain, and internal demand.

But, according to the brokerage, software remains a major hurdle in the humanoid robot industry. Training humanoid robots requires computing power at least 10 times that needed for autonomous driving, according to Tesla.

Still, platforms like NVIDIA’s Omniverse and Cosmos are helping standardize development and reduce time to market.

“This represents a significant shift towards standardisation in robotics software development and simulation, which in turn should facilitate scalability and broader adoption,” the analysts noted.

Furthermore, geopolitical developments may split the market between China and the West. As humanoid robots begin to enter households, privacy and cybersecurity concerns could prompt restrictions on Chinese software and hardware.

Chinese manufacturers such as Unitree and Agibot are already mass producing on a small scale and could gain early-mover cost advantages.

Macquarie believes supply chain firms are among the biggest beneficiaries of humanoid robot market growth. It highlights Zhejiang Sanhua (SZ:002050) and Harmonic (NASDAQ:HLIT) Drive Systems Inc (TYO:6324) as top picks, given their roles in the actuator and speed reducer markets.

“Established industry leaders are well positioned to benefit from the early adoption cycle,” the note states.

However, the opportunity goes beyond factories. Warehouses, healthcare, and eventually households are seen as future markets.

Robots are being tested in Amazon (NASDAQ:AMZN) and BMW (ETR:BMWG) facilities, while use cases in elderly care and logistics are expanding.