May
1st
2025
(Image by Cindy Li)Robots are indeed helping American manufacturing by replacing human labor. In 2024, the average cost of wages and benefits for a manufacturing worker in the U.S. is approximately $45 per hour; whereas the total lifecycle cost of a robotic arm in a factory is about $10 per hour, and this cost continues to decline. As for humanoid robots being developed by companies like Tesla, the expected usage cost by 2030 will be around $2-4 per hour. This means that robots are significantly reducing labor costs.
Considering the low industrial electricity prices in the U.S., the costs of international shipping, and the investment tax incentives and chip legislation provided by the government, theoretically, AI and robots could make manufacturing costs in the U.S. *lower than* those of current overseas factories.
So does this mean that the U.S. no longer needs Chinese manufacturing? Not at all.
Firstly, Chinese manufacturing is also becoming more automated, and at a faster pace. Currently, China has 320,000 robots, accounting for 52% of the global total, while the U.S. has only 57,000 robots. The robot density per 10,000 workers in China is 470, compared to just 274 in the U.S.
Furthermore, American robotics heavily relies on China. Tesla is soon expected to reach an annual production level of tens of thousands of robots, but 90% of the components for these robots are either made by Chinese companies or by Chinese companies in Mexico.
Particularly, the motors for these robots can currently only be produced in China.
Of course, Japan and South Korea are also major players in robotics, with domestic companies like Yuzhu Technology gaining momentum, but for now, the brains of robots are still strong in the U.S., while the bodies are strong in China. Trump’s trade war could be a setback for American robotics.
So what does the future hold? It remains uncertain.
If we simply consider “manufacturing = energy + information,” then the U.S. has advantages due to cheap energy and strong information technology — but that “eventuality” may be many years away, and by then, manufacturing may not even be that important.
In the next ten to twenty years, perhaps high-end clothing and other items emphasizing personalized customization will be produced locally in various countries; while cheaper, mass-produced items will remain in a few manufacturing hubs.