BEIJING - China, already a dominant force in the electric vehicle (EV) market, is now setting its sights on the next frontier: battery-powered humanoid robots expected to replace human workers on assembly lines.

At the World Robot Conference in Beijing this week, more than two dozen Chinese companies showcased humanoid robots designed for use in factories and warehouses, with many others displaying the precision parts essential for building them.

China's strategy for this emerging industry mirrors the approach it took a decade ago in the EV sector: government backing, fierce price competition from numerous new entrants, and a robust supply chain.

"China's humanoid robot industry demonstrates clear advantages in supply-chain integration and mass production capabilities," said Arjen Rao, an analyst at the China-based LeadLeo Research Institute.

This push into robotics is supported by President Xi Jinping's policy of developing "new productive forces" in technology, a theme emphasized in brochures distributed at this week's event.

Beijing has launched a $1.4 billion state-backed robotics fund in January, while Shanghai announced plans for a $1.4 billion humanoid industry fund in July.

Many of the robots displayed this week utilize components from domestic suppliers that previously supported the EV boom, such as battery and sensor manufacturers.

Goldman Sachs projected in January that the annual global market for humanoid robots could reach $38 billion by 2035, with nearly 1.4 million units shipped for consumer and industrial use. The cost of materials to build these robots has decreased to around $150,000 each in 2023, excluding research and development expenses.

"There is big room to squeeze the cost down," said Hu Debo, CEO of Shanghai Kepler Exploration Robotics, a company he co-founded last year, inspired by Tesla's humanoid robot Optimus.

Hu's company is now on its fifth iteration of a worker robot, which is set to be trialed in factories. He anticipates the sales price will be less than $30,000.

Tesla's entrance into the Chinese market had what officials called a "catfish effect," spurring domestic competitors to innovate and accelerate their efforts. Tesla's Optimus robot has had a similar impact.

Tesla introduced Optimus in 2021, with CEO Elon Musk describing it as potentially "more significant than the vehicle business over time." The company is applying an AI approach to Optimus, modeled on its "Full Self-Driving" software for EVs. While Chinese competitors acknowledge Tesla's lead in AI, they believe China has the capability to significantly reduce production costs.

At the Beijing exhibition, Tesla showcased Optimus standing in a plexiglass box next to a Cybertruck. Although outshone by more animated Chinese humanoids, Optimus remained one of the most popular exhibits.

"Next year there will be more than 1,000 of my compatriots in the factory," read a sign next to Optimus. Tesla reiterated that it plans to move beyond prototypes and start producing Optimus in small volumes next year.

UBTECH Robotics, listed on the Hong Kong Stock Exchange, has been testing its robots in car factories, beginning with Geely. On Thursday, the company announced a deal to test robots at an Audi plant in China.

"By next year our goal is going to mass manufacturing," said Sotirios Stasinopoulos, UBTECH's project manager. This would involve up to 1,000 robots working in factories, marking the first step toward large-scale deployment.

UBTECH's robots use Nvidia chips, but more than 90% of the components are sourced from China.

Currently, the global market for production robots, such as the massive arms used for welding, is dominated by companies outside China, including Japan's Fanuc, Swiss engineering group ABB, and Germany's Kuka, owned by Chinese home appliance manufacturer Midea.

China leads the world in factory-installed production robots, with more than triple the number in North America, according to the International Federation of Robotics.

At the conference's opening, Xin Guobin, China's vice-minister for industry and information technology, emphasized that the ministry had been following Xi's directives, making China "an important force in the global robot industry."

While China has set a goal for mass production of humanoid robots by 2025, this will begin on a much smaller scale than required for a significant transformation in EV production.

"I believe that it is likely to be at least 20 to 30 years before humanoid robots can achieve large-scale commercial application," said LeadLeo Research Institute's Rao.