Morgan Stanley: Humanoid robots are "overhyped in the short term, underestimated in the long term"; commercialization is the key to success or failure

Morgan Stanley: Humanoid robots are "overhyped in the short term, underestimated in the long term"; commercialization is the key to success or failure

The humanoid robotics industry is at a crossroads full of contradictions, with market sentiment swinging between short-term hype and long-term tremendous potential.

According to Wind Chasing Trading Desk, investment bank Morgan Stanley pointed out in its latest industry outlook report that the humanoid robot sector displays the distinctive characteristic of being "overhyped in the short term, but having its long-term potential underestimated."

On one hand, short-term market sentiment is running hot and order numbers are impressive, but hidden behind this are risks of delivery uncertainty. On the other hand, its long-term potential is seriously underestimated. Morgan Stanley forecasts that by 2050, the global market size could reach $5 trillion USD, far exceeding the current automotive industry.

The report holds that, although the industry is developing rapidly, commercial rollout will be the decisive factor for future success, and also the touchstone for validating the true value of the sector.

Short-term Overheating: The Reality Test Beneath Surging Orders

The report states that the Chinese market will show astonishing heat in the second half of 2025, with integrators announcing orders totaling over 2 billion RMB (about $300 million), mainly from the fields of industry, commercial services, and data centers.

However, behind the flashy numbers lurk concerns. Morgan Stanley stresses, "Although the headlines are eye-catching, we acknowledge that many orders cannot be fulfilled this year, and some are just 'framework orders' with low certainty of execution."

This phenomenon is accompanied by aggressive shipping targets from companies in the sector—some predicting shipment volumes reaching 100,000 units by 2026. In contrast, Morgan Stanley, based on 'limited working capability', holds a more conservative estimate of near-term growth.

Long-term Underestimation: The Grand Narrative of a $5 Trillion Track

In stark contrast to the short-term uncertainties, the long-term market space of humanoid robots is vastly underestimated. Morgan Stanley’s global Total Addressable Market (TAM) model offers a striking prediction: by 2050, the global stock of humanoid robots will reach 1 billion units, with annual revenue market size approaching $5 trillion USD.

What does this mean? The report compares that, in 2024, the combined revenue of the world’s top 20 auto manufacturers is around $2.5 trillion. Thus, the future market for humanoid robots may be double that of the current global automobile industry.

Specifically, the report forecasts:

  • By 2036, the global cumulative number deployed will be about 23.7 million units.
  • By 2040, this number will leap to 134 million units.
  • By 2050, China alone will have over 302 million units, while high-income countries (including the USA) will have about 296 million units.

This grand long-term narrative is the cornerstone supporting the track’s long-term investment value.

In terms of price, the report assumes the initial price of robots in high-income countries will be $200,000, dropping to around $50,000 by 2040; in other markets, initial price will be about $50,000, expected to drop to around $15,000 by 2050. Persistent cost reduction will be key to propelling their adoption from industry to commercial and even household applications.

Morgan Stanley believes that as technology matures and costs decline, humanoid robots will first become prevalent in commercial sectors, before entering households. The report predicts that by 2050, commercial applications will account for the vast majority, about 935 million units, while household applications will be about 84 million units. This grand vision is the fundamental reason that attracts numerous tech giants and startups to commit to the sector.

Commercialization: From "Flexing Muscles" to "Calculating ROI"

The report clearly stated that the key success factor for the industry’s development is commercial rollout. Industry participants increasingly agree: "In industrial settings, the physical form factor of robots is less important; Return on Investment (ROI) is the key metric, driven by efficiency, accuracy, and cost."

This means that the phase of simply demonstrating technical prowess ("flexing muscles") is passing, and whether value can be created for customers in real scenarios ("calculating ROI") has become the sole criterion for testing companies.

Currently, there are several positive commercialization cases:

  • Figure AI: Its Figure 02 robot has participated in the production of 30,000 vehicles at BMW’s Spartanburg plant in the past six months, installing over 90,000 parts cumulatively.
  • Booster Robotics: Since its founding in August 2023, it has delivered over 700 humanoid robots to more than 200 clients in over 20 countries.
  • Ubtech: Expected to reach a production capacity of 5,000 industrial humanoid robots by 2026.

The report also stresses that software will be the "key competitive differentiator", while the hardware supply chain (except reducers) has basically been domesticized (>90%), laying the foundation for commercialization.

The Ambition of China’s Humanoid Robots

China’s market development has received powerful momentum from policy and capital. The report reviews that, since 2023, a series of support policies have been issued from central to local levels. Recently, China’s Ministry of Industry and Information Technology established the Humanoid Robot Standardization Technical Committee.

According to The Paper, on November 24, the MIIT publicized the appointments on its official website: Wang Xingxing from Unitree Robotics and Peng Zhihui from Zhiyuan Innovation (Shanghai) are candidates for deputy director of the Humanoid Robot Standardization Technical Committee.

Even more noteworthy for investors is funding support. The report tallies that various regions have announced the establishment of several related funds, with total size reaching about 187 billion RMB, providing ample capital ammunition for sector development. In the primary market, competition for funding is also fierce; Unitree and Leju (Leju Robotics) are sprinting toward IPOs, while listed firms like Ubtech and Dobot are engaging in vertical integration investment through placings.

This dual-engine model of "policy + capital" offers China a unique advantage in the global humanoid robot race, and signals the industry’s acceleration from the technology exploration phase into the promotion phase of commercialization.

Morgan Stanley’s latest report reveals the contradiction of the humanoid robot market being "overheated in the short term, underestimated in the long term." For investors, the key is to see through the short-term 2 billion RMB+ but "inflated" order numbers, and focus on commercialization and ROI verification. Despite real challenges, the report predicts the global market size will reach $5 trillion by 2050, with enormous potential. In China, approximately 187 billion RMB of policy funds and an active capital market are driving sector development. Ultimately, software capabilities will decide the outcome.

 

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The above wonderful content is from Wind Chasing Trading Desk.

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