China’s robotics sector will need 5 years to reach its ‘EV moment’, says MetaX investor

China’s robotics industry may need at least five years before humanoid models reach a similar level of acceptance to electric vehicles, according to private equity firm Hermitage Capital, the latest voice warning of a potential bubble in the sector.\nThe firm, which manages US$1.5 billion in assets, was an early investor in Chinese graphics processing unit designer MetaX Integrated Circuits, whose shares skyrocketed 700 per cent on their debut in Shanghai last month.\nIn an interview with the Post, Hermitage founder and CEO Sean Xiang Yuqiu said the embodied intelligence sector – the new darling of investors in China – would prosper, but its development would “not be too fast given the current technology bottlenecks”.\nXiang said there were numerous technical challenges in the current level of humanoid robots, including the “brain’s” ability to coordinate precise motion control, as well as limitations in the dexterity of components like robotic hands.\n“A humanoid robot that would be accepted by mass consumers should at least be able to complete certain tasks autonomously,” said Henry Zhang Menghan, president and managing partner of Hermitage Capital. “But unfortunately, few of the existing makers can achieve this currently.”\n\nXiang said it might take five years for the robotics sector to reach its equivalent “EV moment”, when Chinese carmakers shook global markets with their low-cost, mass-produced vehicles.\nEmbodied intelligence, which was among the strategic sectors included in China’s latest five-year plan starting 2026, has captured the public’s imagination with images of dancing and fighting robots.\nMeanwhile, robot makers have become the darlings of investors and tech giants like Alibaba Group Holding, Baidu and Meituan. Alibaba owns the Post.\nThe sector was estimated to have raised over 57 billion yuan (US$8.15 billion) in 2025, an increase of more than 170 per cent from the year before, while about 30 firms in the robotics value chain submitted applications for an IPO in Hong Kong, according to data service provider ITjuzi.\nThere are more than 150 robot makers in mainland China, including well-known names such as Unitree Robotics, Ubtech Robotics and AgiBot. Unitree has completed its tutoring for a listing on the mainland market, while AgiBot and Hong Kong-listed Ubtech have each acquired a Shanghai-listed company.\nHermitage said the robotics industry would go through a consolidation like the electric vehicle sector, leaving only a handful of major players standing.\nBased on the current investment hype, Zhang said the market was overheated and he saw signs of a bubble emerging. One concern was the trend where core developers and engineers at top robotics companies were leaving to set up their own start-ups.\n“It will spread the limited talent and capital pool too thinly across too many start-ups, just like what the EV industry experienced several years ago, and the industry consolidation will be inevitable,” Zhang said.\nChina’s state planners issued a similar warning in late November. The National Development and Reform Commission said that with over half of robotics firms being start-ups and newcomers, there was a risk that “me-too” products could flood the market and the competition would squeeze resources for research and development.\nZhang highlighted the importance of achieving “end-to-end autonomous capability”, where humanoids could execute specific tasks without human guidance or interference. But this would require robotic chips with high computing power and large amounts of AI data on physical factors.\n\nHowever, Hermitage CEO Xiang said a bubble was normal during the development of an emerging industry, adding that the risks could be minimised given China’s huge engineering talent pool and its manufacturing prowess.\nThe National Venture Capital Guidance Fund, which was established in late December, with a state contribution of 100 billion yuan and three 50 billion yuan regional funds, could also help address short-sighted tendencies in China’s tech investment industry, said Xiang.\nIn the past, mainland start-ups in many sectors were often asked by investors to give promises of share repurchases if they missed certain financial targets, which distracted from achieving technological breakthroughs.\n“The patient capital channelled by the fund, which has a 20-year duration, will help the hard tech start-ups in early-stage innovation,” said Xiang.\n