Humanoid robots are advanced machines designed to replicate human movements, actions, and interactions, enabling them to perform a diverse range of tasks in both structured and dynamic environments. As a fusion of cutting-edge robotics and artificial intelligence, they represent a transformative leap in technology, often blurring the line between human capability and mechanical precision.
The commercial viability of humanoid robots is no longer a question of "if" but "when." As technology continues to advance and costs decline, humanoids are poised to transition from futuristic concepts to practical, everyday tools across industries.
Several key trends are converging to drive the rapid growth of the humanoid robot market, creating new opportunities for adoption at scale. From declining cost curves to labour shortages and increasing automation demands, these trends are reshaping the economic and technological landscape.
In this article, we outline four key drivers that we believe will fuel the expansion of humanoid robots and solidify their commercial potential.
By: Shirley Mabasa
Labour Shortages
The growing labour shortage in the U.S. manufacturing industry, with the gap projected to widen significantly by 2030. Historically, manufacturing employment levels remained stable but have declined sharply in recent years, exacerbating concerns about workforce availability. The projected downward trend highlights an urgent need for alternative solutions to bridge this gap.
Figure 1: Labour Shortages in US Manufacturing Sector
Source: Goldman Sachs, OECD, FRED (2024)
Robots, particularly humanoid robots, present a viable response to this challenge. As the cost of robotic systems continues to decrease, their deployment in manufacturing processes becomes increasingly feasible. Robots can fill critical roles, maintain productivity, and reduce dependency on human labour, addressing the skills gap and ensuring operational continuity. This shift not only mitigates labour shortages but also enhances efficiency and competitiveness in the U.S. manufacturing sector.
Goldman Sachs estimates that humanoids will account for 10-15% of roles in hazardous and auto-manufacturing settings by 2035, with significant demand for tasks in dangerous environments. This demand is bolstered by national policies encouraging the use of robots for hazardous jobs and by the adaptability of humanoids to dynamic environments.
Technological advancements
Technological advancements will be at the heart of driving the adoption of humanoid robots, enabling their evolution from conceptual prototypes to functional tools in diverse applications.
JLL notes Industrial robots are being used more frequently in Chinese construction and warehouse operations to improve efficiency, accuracy, quality, and safety. There is also a growing demand for specialised robots in tasks such as high-rise window cleaning and security. Furthermore, humanoid robots also hold immense potential for real estate applications. The biggest challenge against widespread adoption in various tasks is the low level of autonomy, with robots requiring human assistance or supervision when performing complex or unstructured tasks.
Figure 2: Use Case Scenarios of Robots in Real Estate
Source: JLL PropTech Database (2024)
The figure above shows that in unstructured environments, humanoid and service robots are prominent, handling tasks requiring adaptability and decision-making, such as delivery, patrol, and sanitation. High-level autonomy enables robots to engage in roles like rescue operations, security, and hospitality services, where adaptability to dynamic conditions is critical. Service robots are well-represented with an estimated 48% of Chinese robotics companies. The number of companies producing these robots currently is low, with only 5% of humanoid robotics companies operating in the space.
Breakthroughs in end-to-end AI, multi-modal algorithms, and integration of advanced robotics technologies as critical to improving humanoid robot capabilities. The integration of multi-modal AI, allows humanoids to "see, learn, move, and act." These advancements enable robots to navigate complex environments and perform diverse tasks, from industrial applications to caregiving
Specific advancements such as Tesla's Optimus Gen 2 and improved manipulation and interaction skills are cited as significant milestones. These developments enable robots to perform complex tasks more efficiently, which supports faster adoption.
Declining Cost Curves
The cost of adoption has long been a barrier to the widespread implementation of humanoid robots. However, with advancements in technology and increasing economies of scale, the cost curves for these robots are on a steep downward trajectory.
A 2024 Goldman Sachs report forecasts an accelerated decline in humanoid robot costs, surpassing prior expectations, with significant implications for their economic viability. Factory applications are now expected to reach a two-year payback period between 2024 and 2027, compared to earlier estimates of 2025–2028. Similarly, consumer applications are anticipated to achieve this milestone 2–4 years earlier than previously predicted, now projected between 2028 and 2031.
The analysis assumes productivity improvements, with humanoid robots working up to 20 hours a day by 2027 and achieving output efficiency equivalent to double that of a human worker. These advancements in cost reduction and productivity indicate an accelerating timeline for widespread adoption, driven by both technological progress and declining unit costs. This trend underscores the growing economic feasibility of deploying humanoid robots across various industries and consumer markets.
Figure 3: Humanoid Robot Cost Curves vs Output
The declining cost curve for humanoid robots, as highlighted below, forecasts a significant reduction in costs from approximately $10/hour in 2025 to near-zero levels by 2045. This trend suggests a steep decrease in operational expenses, driven by advancements in robotics, economies of scale, and improved manufacturing technologies. Such cost reductions are expected to accelerate the adoption of humanoid robots across various industries, making them economically viable alternatives to human labour for tasks that require consistency, precision, or operation in hazardous environments. As costs continue to fall, even small businesses and developing economies may adopt humanoids, further driving innovation and market growth.
Figure 4: Humanoid Robot Cost Curve (est.)
Source: Rethinx (2024)
Changing Public Perceptions on Humanoids
One of the biggest limiting factors for widespread humanoid technology adoption is the societal implications of using robots, with public perception heavily influenced by cultural and social norms. Many people feel uneasy about integrating robots into everyday life, fearing job displacement, ethical dilemmas, or even a loss of human connection.
A study by the European Commission assessing the public perception of robots in healthcare found that the majority of respondents (813) expressed a "Fairly positive" view, followed by a smaller subset (146) with a "Very positive" perspective. Negative attitudes were minimal, with only 125 and 8 respondents indicating "Fairly negative" and "Very negative" views, respectively. These findings suggest a strong societal inclination toward embracing robots, which may reflect a growing acceptance of automation and technological advancements. This trend could have significant implications for the integration of robots in various industries and the broader societal discourse on automation.
Figure 5: General Public Perceptions of Robots
Source: European Commission (2024)
When considering the use of robots to perform tasks that are too hard or dangerous for people to complete, the majority of respondents (57.9%) "Totally agree" that robots are suitable for such tasks, while 37.0% "Somewhat agree." A small minority "Somewhat disagree" (3.8%) or "Totally disagree" (1.3%), reflecting minimal opposition. These results indicate strong public approval for the deployment of robots in hazardous or challenging roles, highlighting their potential to mitigate human risk and increase efficiency in dangerous environments. This perspective aligns with the broader acceptance of robots as valuable tools in specific, high-risk applications.
Figure 6: Public Perceptions of Robot Use (Complex Tasks)
Source: European Commission (2024)
Another study assessed the public perceptions of Artificial Intelligence (AI) which are central to further developments in the Humanoid Robotics industry. The study found varying public perceptions regarding the use of robots and AI technologies in specific applications. Positive sentiment is evident for tasks involving physical assistance and convenience, such as robotic vacuum cleaners (22% "Very beneficial," 49% "Somewhat beneficial") and robotic care assistants (17% "Very beneficial," 42% "Somewhat beneficial"). These findings suggest that robots performing practical, non-intrusive roles are generally welcomed.
However, scepticism arises in applications requiring greater trust or perceived risk, such as driverless cars (16% "Very beneficial," 31% "Somewhat beneficial") and assessing welfare eligibility (9% "Very beneficial," 37% "Somewhat beneficial"), where concerns about safety, fairness, and ethical considerations may play a role. Notably, robots used for tasks involving decision-making or sensitive areas, like assessing job eligibility or targeted political advertising, receive the least confidence, with high percentages indicating they are "Not very" or "Not at all" beneficial.
Figure 7: Public Perceptions of Artificial Intelligence (AI)
Source: Alan Turing Institute
These results underscore the importance of public trust and ethical considerations in the deployment of AI and robotic technologies, especially in contexts involving decision-making or safety-critical applications. Clear communication about benefits, limitations, and safeguards will be crucial to addressing public concerns.
In addition to this, the studies indicate that demographic factors such as familiarity and personal experience with robots influence acceptance. Men and younger participants were more accepting of robots.
Celebrity culture could potentially play a significant role in further shaping widespread societal acceptance, as public figures can normalise emerging trends through their influence. For instance, Kim Kardashian's ownership of Tesla’s $ 20,000 humanoid robot may prompt a shift in how such technologies are perceived, framing them as aspirational or desirable driving up public demand.
So where to next?
The market for these robots is experiencing rapid expansion, with its value expected to grow significantly from $1.8 billion in 2023 to surpass $38 billion by 2035, as projected by Goldman Sachs.
Figure 8: Forecast Market Share Growth (2040)
Source: Goldman Sachs Research (2024)
Citi GPS forecasts that Humanoids are poised to become the third-largest segment in the robotics market, reflecting their adaptability across various applications, including caregiving, customer service, industrial support, and more. This trajectory is bolstered by declining costs, technological advancements, and their ability to replicate human-like functions, making them attractive for tasks traditionally performed by humans.
Figure 9: Forecast Number of Robot Units by Type
Source: Citi GPS (2024)
Citi forecasts 648 million humanoid units by 2050, driven by advancements in dexterity, cost reductions, and betterment opportunities. The report also predicts high penetration rates in developed and less-developed regions, underscoring the broad appeal of humanoids across global markets.
The expanding unit numbers imply that humanoids are not only commercially feasible but are also poised to become integral to industries facing labour shortages or requiring automation. This growing market share suggests strong demand, driven by their versatility and potential to address complex societal and economic challenges.
As adoption scales, economies of scale and innovation will further enhance their affordability and accessibility. In our view, this will cement humanoid robots as a commercially viable and transformative technology. And this industry, which attracted $955 million in VC investment in just the first half of 2024 (compared to $380 million for FY2023) will continue to generate interest from VC investors.
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