Toyota aims to become a global powerhouse in robotics, as the world’s largest automaker modernizes its production lines to compete with China and diversify beyond the auto industry.
Its top executives have sparked global investor interest in its robotics strategy, including plans to deploy 400,000 robots as part of a $6.4 billion annual investment plan to automate factories and establish a dedicated robotics team under its chief manufacturing officer.
In April, at Tokyo’s Toyota Arena, the automaker gave a glimpse of its robotics prowess. Its black and red AI-powered humanoid robot Cue7 bounced a basketball on the court and shot the ball into the hoop, drawing cheers from the crowd.
Another sign of its seriousness came in July when Toyota’s AI robotics spinoff Walden Robotics came out of stealth mode, raising $300 million at a valuation of $1.1 billion. The startup has been dubbed the “jewel” of its robotics ecosystem by Bernstein analysts and has already deployed its versatile robots in Toyota factories across North America.
Investor buzz is growing amid mounting evidence that Toyota is using two decades of robotics research and development to bring intelligent robots to market and compete with Tesla, Xpeng and Hyundai.
“I think Toyota could be the biggest humanoid robot company on the planet — they just need to take care of it,” said Carl Vine of M&G, a Toyota investor.
“Whoever controls the software layer will control global manufacturing. Toyota develops its own large behavioral models…and they have enormous amounts of data internally because of the sheer size of the company. These are essential ingredients.”
Analysts at Goldman Sachs agree, estimating that Toyota’s technological expertise and mass production allow it to capture 3 to 8 percent of the humanoid market by 2035, the equivalent of 190,000 to 540,000 units.
Despite recent optimism, other shareholders warn that Toyota has a host of other innovations, from hydrogen cars and its in-house software platform to solid-state batteries, that haven’t lived up to or yet haven’t lived up to the hype.
Japan was practically synonymous with robots in the 2000s and 2010s, from Honda’s Asimo to SoftBank’s Pepper. However, the rise of AI and viral videos showing Chinese humanoids dancing and fighting kung fu have reinforced the idea that Japan is lagging behind the United States and China.
Toyota is a laggard in defining a robotics vision because rival automakers have also turned to robotics to reduce vehicle manufacturing costs and find new revenue streams.
Late last year, Hyundai announced plans to invest $86 billion in South Korea by the end of the decade, with big commitments to AI and robotics. The Korean group, which bought Boston Dynamics at the end of 2020, plans to produce the American company’s Atlas humanoid robot in 2028 in its Georgia factory, with an annual capacity of 30,000 units.
Elon Musk also made the bold claim that his Optimus robot would be “the biggest product ever” for Tesla with a long-term goal of producing 1 million units per year. Production has now started, but mass manufacturing has not yet begun.
Sources close to Toyota say the sudden drive to advance its robotics ambitions under new chief executive Kenta Kon was driven by a realization of the need to step up efforts to compete with China in factories as well as technology.
Toyota will have the opportunity to introduce robotics when it begins operating a new vehicle assembly plant – the first since 2012 in Japan – near Nagoya in the early 2030s.
“Managers have almost stopped thinking about new technologies to build vehicles,” said a former Toyota executive. “The production system is now one of the keys to compete with China. Robots are one of the elements to compete with China’s manufacturing industry.”
Toyota had been cautious about publicly announcing its robot ambitions, fearing that employees would fear job losses, but with labor shortages in Japan and other major economies, those constraints are now easing.
The project is not simply about developing robots to improve its own manufacturing capabilities. Toyota claims to become a “mobility” company that generates revenue beyond just traditional automobile production.
Around 250,000 of the 400,000 robots that Toyota wants to deploy are intended for group companies and their suppliers.
“They say they’re going to start by building robots to address factory automation (and) labor shortages,” another Toyota investor said. “But they are showcasing their skills and this could be a model, a test to go further.”
Investor hype over humanoid robots has increased as the automotive market offers less room for growth and the price of a humanoid robot is likely to be significantly higher than the cost of a new car.
Masahiro Akita, an analyst at Bernstein, said Toyota’s calling card may be “integrating robots, AI and production processes into a superior operating system” rather than developing sophisticated robots.
Its California subsidiary Toyota Research Institute has developed a fundamental model that translates high-level decisions into physical actions and precise, real-time motor control, which is used in Boston Dynamics’ humanoid Atlas.
The in-house developed 50-kilo Eley humanoid will also use the internal base model to learn new tasks by observing factory workers, particularly those involving fine motor skills such as moving parts between boxes.
But others criticize the idea that robotics will be a large-scale autonomous business for Toyota and insist that the main goal of robotics is to improve manufacturing of the 10 million cars produced each year.
Tomohiro Nomi, head of humanoid robotics research at Toyota, said in a presentation earlier this year: “We place the highest priority on deploying robots in our own factories, where there is real demand and the environment can be controlled. »
The former Toyota executive said that powerful President Akio Toyoda is “a car enthusiast – but he’s not a robot enthusiast” and that his main goal is to strengthen the auto sector, which still remains the world leader. “They don’t need to move away from the auto business now.”
An Asia-based Toyota investor said the sale of 200,000 humanoid robots would be “irrelevant to its base production of 10 million cars”, assuming similar economic conditions. “It’s the kind of thing that gets rewarded if Toyota’s core auto business does well and is seen as a distraction if the auto business suffers.”
Additional reporting by Kana Inagaki. This story has been edited since publication to reflect the fact that Tesla has now started manufacturing Optimus.
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