Investor appetite for China’s robot stocks is drying up fast. After months of viral robot dance videos and ridiculous stock pops, the cracks are finally showing, after China’s National Development and Reform Commission warned on November 20 that the sector is bubbling over with hype and overcrowding.
The Solactive China Humanoid Robotics Index had surged by nearly 60% year-to-date in October, thanks to government support and clips of robots kickboxing and racing going viral on TikTok, Instagram, and Twitter.
As of press time, the index is currently down by 20%, and according to Bloomberg, more than 150 companies are building almost-identical robots, so this flood of sameness could crush real R&D efforts.
China’s UBTech Robotics has seen its stock more than double in value year-to-date, even though it reported a ¥414 million ($58.5 million) loss in just the first half.
Even Morgan Stanley threw shade. Their analysts warned that actual industrial use cases are weak and that the efficiency of humanoid robots still lags behind humans. While optimists are betting on 100,000 units sold in 2026, Morgan Stanley only sees about 12,000 units that year, and 114,000 by 2030.
Local governments push junk robots as China cracks down
The central government is also worried about local governments rushing into tech projects without proper planning. This year, China launched an “anti-involution” campaign to stop industries from cannibalizing themselves with copy-paste competition.
The frenzy kicked off earlier this year after Hangzhou-based Unitree Technology’s robots went viral during the Spring Festival Gala. That put humanoid robots front and center in China’s new five-year plan, where the industry was named one of six major growth drivers through 2030. That fuelled more investments, more copycats, and now, more government concern.
Still, not everyone’s running for the exit. Citigroup predicts “exponential” growth in humanoid robot production next year. And some believe China’s lower production costs and massive engineering base give it a long-term edge. But even optimists admit that the short-term might get rough.
According to Goldman Sachs, future success depends on two things: real-world applications and strong product performance. Without that, all the viral videos and moonshot IPOs won’t mean much.
“Looking ahead, as scale production drives costs down, core components become localized, and B2B applications gain traction, the industry’s growth path will become clearer and profitability will gradually emerge,” said Cheng Qiang, chief economist at Topsperity Securities.
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