The industry scale will double in four years! Morgan Stanley: China is the largest robot market in the world, and drones will account for 40%
Morgan Stanley analysts pointed out that China is the world's largest robot market, with the market size expected to reach USD 47 billion in 2024 and grow to USD 108 billion by 2028, with a compound annual growth rate of 23%. Drones, mobile robots, and collaborative robots are the main drivers, with compound annual growth rates of 20%, 35%, and 46%, respectively. The robot density in China has significantly increased, corporate productivity has improved noticeably, and market share continues to grow
According to Morgan Stanley, China is leading a new round of transformation in the global robotics industry.
According to news from the Chasing Wind Trading Desk, Morgan Stanley analysts stated in a report on June 17 that China is not only the largest robotics market in the world but also the production base for 55% of global robotic products. By 2024, the scale of China's robotics market is expected to reach USD 47 billion, accounting for 40% of the global total.
Analysts predict that by 2028, the overall market size will increase to USD 108 billion, with a compound annual growth rate of 23%. This growth is primarily driven by drones, mobile robots, and collaborative robots, with compound annual growth rates of 20%, 35%, and 46%, respectively. Key components such as motors, batteries, sensors, and vision systems will become the most promising investment targets, with sensors and vision systems expected to achieve the fastest growth.
Why China has become the world's largest robotics market
Morgan Stanley analysts believe that China's dominant position in the robotics market is not accidental but the result of multiple factors working together.
First, the fundamental changes in the labor structure have driven a surge in automation demand. The producer price index and consumer price index have shown a persistent divergence, making it difficult for manufacturers to pass on rising costs. This structural contradiction has forced Chinese manufacturing to accelerate the adoption of robotic technology.
Data shows that the density of robots in China's manufacturing industry has skyrocketed from 97 units per 10,000 people in 2017 to 470 units per 10,000 people in 2023, an increase of 4.8 times. More importantly, Chinese companies that have adopted robots have labor productivity and total factor productivity that are more than 30% higher than those that have not used robots. Whenever the number of robots per employee in a company doubles, labor productivity and total factor productivity increase by 11% and 8%, respectively.
Technological innovation and supply chain advantages further consolidate China's market position.
China has established a complete supply chain system from design to assembly, achieving large-scale localized production of key components. In the field of industrial robots, the market share of Chinese brands has increased from 28% in 2019 to 51% in 2024. In emerging fields such as mobile robots, service robots, and drones, the localization rate of Chinese brands has reached over 90%.
Industrial Structure Differentiation and Growth Drivers
The Chinese robot market shows significant structural differentiation characteristics.
Although traditional industrial robots still hold an important share, their growth is relatively moderate, with a projected compound annual growth rate (CAGR) of 18% from 2025 to 2028. The real growth engine comes from emerging types of robots: collaborative robots have a CAGR of 46%, mobile robots 35%, and service robots 25%.
The drone market performs particularly well, with the market size in China reaching USD 19 billion in 2024 and expected to reach USD 40 billion by 2028, becoming the largest single category in the robot market, accounting for nearly 40% of the total market share. This growth is mainly driven by dual demand from military and civilian sectors, with applications of civilian drones rapidly expanding in agriculture, surveying, inspection, and other fields.
The rapid growth of collaborative robots reflects the manufacturing industry's demand for flexible production. Compared to traditional industrial robots, collaborative robots offer higher safety and flexibility, enabling them to work alongside humans, making them particularly suitable for small and medium-sized enterprises and scenarios involving small-batch production of various products. Chinese collaborative robot brands have captured over 60% of the global market share and are rapidly expanding into overseas markets.
Supply Chain Opportunities and Investment Value Chain
Morgan Stanley believes that investment opportunities in the robot industry chain are concentrated in two dimensions: market growth and localization substitution.
The total market size of China's robot components is expected to reach USD 40 billion by 2024, with a projected CAGR of 23% from 2025 to 2028. Among these, motors and batteries will become the largest sub-markets, accounting for 13% and 17% of total material costs by 2028, respectively.
In terms of growth potential, sensors and vision systems exhibit the strongest growth momentum. As robots evolve towards intelligence and autonomy, the demand for high-value electronic components such as force sensors, LiDAR, and 3D vision will grow rapidly. Force sensors are expected to have a CAGR of 26%, LiDAR 24%, and vision systems 23%.
The localization process creates significant market substitution space for domestic suppliers. Currently, there are significant differences in the localization rate of China's robot supply chain: the localization rate for batteries and LiDAR is the highest, exceeding 90%; the localization rate for visual sensors and motors is about 55%; while the localization rates for harmonic reducers and RV reducers are relatively low, at 70% and 55%, respectively, indicating substantial room for improvement Although the market size for humanoid robots is currently small, the long-term potential is enormous.
Morgan Stanley predicts that by 2050, the global humanoid robot market will reach $5 trillion. China is expected to have 252,000 humanoid robots by 2030, increasing to 302 million by 2050, accounting for 30% of the global stock. The material cost composition of humanoid robots is more complex, with sensors accounting for as much as 31%, and motors 19%, bringing new growth opportunities for related suppliers.
Technological Evolution Drives Expansion of Application Boundaries
Morgan Stanley states that the integration of artificial intelligence technology is redefining the application boundaries of robots.
Traditional robots require complex programming and specialized integration teams, but now, through "no-code" programming and the application of large language models, the deployment threshold has been significantly lowered. ABB's graphical drag-and-drop programming interface can save 99.96% of programming time, while reducing cycle time by 48% and energy consumption by 36%.
The application of digital twin technology further optimizes the deployment efficiency of robots. Through simulation testing in a virtual environment, companies can optimize the robot's movement paths and workflows before actual deployment, reducing the time and cost of physical testing. KION Group utilizes NVIDIA's digital twin platform to test multi-robot collaboration, verifying in a virtual environment before actual deployment.
The enhancement of robotic collaboration capabilities opens up the possibility of unmanned factories. Modern robots are no longer standalone devices but intelligent systems capable of coordinating with each other and dynamically scheduling tasks. Autonomous mobile robot fleets can coordinate thousands of devices simultaneously, and humanoid robots can collaborate with different types of robots to complete complex tasks. This enhancement in collaboration capabilities expands the application of robots from single processes to entire production flows.
The continuous decline in costs is a key factor driving the popularity of robots. The average selling price of collaborative robots has dropped from 157,000 RMB in 2016 to 89,000 RMB in 2024, and is expected to further decrease to 58,000 RMB by 2028. The price of intelligent welding robots has also fallen from 250,000 RMB in 2022 to an expected 127,000 RMB by 2030. This downward trend in costs is attributed to the reduction in core component costs, design optimization, intensified competition, and economies of scale.
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