Assembly line for chassis at Hyundai Motor's Ulsan plant in 2035. A humanoid robot Atlas, which looks exactly like a human, is squatting and working while holding bundles of wires in various colors.

The task of installing wire bundles called 'wiring harness' onto the vehicle body is known to be one of the most challenging processes in complete vehicle manufacturing. This is because the length and arrangement of electrical and electronic device wires must vary depending on different car models and options.

To deploy robots in this process, artificial intelligence (AI) technology that can think, judge, and control as complexly as humans is essential.

Humanoid robots equipped with AI connect wires one by one with delicate hand skills similar to humans on the conveyor belt. The final inspection of the installed product is handled by another robot.

Humans only need to walk around the factory and check the software of robots that have issues. When problems occur, the robots recognize the issues themselves through the factory automation equipment communication network and request inspections.

Robots operate 24 hours without rest during nights or weekends, and there is no need to worry about wage increases or strikes. When a new car model is released or processes are added or changed, only the program needs to be updated.

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In 2021, Hyundai Motor Group acquired Boston Dynamics (BD), a U.S. robotics company. To acquire 80% of the shares previously held by Japan's SoftBank, Hyundai Motor Group invested approximately 1 trillion won. This included personal funds from Chairman Chung Euisun.

Why did Chairman Chung invest his own money to acquire BD? It was because he saw the potential of BD in the rapidly growing robotics market.

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This company possesses industry-leading, unrivaled technology in robot hardware. At the time of the acquisition, BD was famous for videos showcasing robots with agile physical abilities, such as performing somersaults, crossing sloped stepping stones, and leaping over obstacles. Outstanding robot mobility means that the company excels at integrating high-performance actuators and control systems, sophisticated sensors, and real-time object recognition through AI.

Chairman Chung Euisun attending the 2025 New Year's event held last January at 'Hyundai Motorstudio Goyang' in Goyang, Gyeonggi Province Photo by Yonhap News

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Recognizing BD's technological prowess, Hyundai Motor Group anticipated the growth of the future robotics market and made a bold investment. Before acquiring BD, Chairman Chung presented a vision at a 2019 town hall meeting to achieve future group revenue composition of 50% from automobiles, 30% from urban air mobility (UAM), and 20% from robotics.

An image of Boston Dynamics Atlas undergoing AI training. Provided by Boston Dynamics

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After acquiring BD, Hyundai Motor Group's top priority was to preserve its identity as an American company.

BD's headquarters is located in Massachusetts, USA, a global robotics R&D hub with over 400 robotics companies and more than 70 research institutions. The world's best robotics talent gathers here. Typically, when a Korean company acquires a foreign company, it tries to transplant Korean corporate culture, but this can risk the loss of foreign talent unfamiliar with Korea's vertical, organization-centered culture.

To avoid such side effects, Hyundai Motor Group developed a strategy that maximizes respect for local culture. For example, 42dot, Hyundai Motor Group's global software center, established overseas branches to attract top software talent worldwide, and Supernal, the UAM development division, was spun off as an independent U.S. corporation-all in line with this policy.

BD serves as a global R&D hub for Hyundai Motor Group's robotics division. Going forward, BD will focus on developing humanoid robots based on AI technology, while Hyundai Motor Group will leverage its world-class manufacturing capabilities to handle mass production, creating strong synergy.

At the end of this year, Hyundai Motor Group Meta Plant America (HMGMA) will conduct a trial deployment of Boston Dynamics' humanoid robot Atlas. Photo by Hyundai Motor Group

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Recently, automakers have been introducing humanoid robots into production sites and going a step further by acquiring stakes in robotics companies through direct investment.

Not only Hyundai Motor Group, but also Tesla is developing its own humanoid robot, Optimus. BMW is testing the feasibility of the humanoid robot 'Figure 02'-developed by U.S. startup Figure AI-at its U.S. plant. Mercedes-Benz has invested in U.S. robotics company Apptronik and is trialing its humanoid robots at its digital factory in Germany and its plant in Hungary.

Chinese companies are even more aggressive. Guangzhou Automobile Group (GAC) unveiled its intelligent humanoid robot 'GoMate' last year and has been applying it to various industries since this year. Geely has partnered with Chinese humanoid specialist UBTECH to deploy the 'Walker S' robot series at its premium Zeekr plant. Xpeng has also been using its self-developed 'Iron' robot in EV production lines since 2024.

A worker assembling the Ioniq 5 while Boston Dynamics' robot 'Spot' inspects the quality of the assembly. Provided by Hyundai Motor Group

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The reason the automotive industry is deploying humanoid robots on production lines is to reduce costs. Global automotive factories are already highly automated; for example, Tesla's Shanghai Gigafactory, considered the most automated among complete vehicle plants, has an automation rate of 95%. Robots are already so prevalent that human intervention is rarely needed on the production floor.

However, the remaining 5% remains a challenge. The 5% of processes that still require human touch are mostly concentrated in the assembly process. The assembly process involves installing about 30,000 parts-including doors, seats, interior materials, electronic components, and wiring-onto a vehicle, and the combinations of parts vary greatly depending on the model and options.

Additionally, assembly parts differ in size, shape, and order of installation, requiring highly advanced judgment from workers. Since there are many small parts and the final quality is directly affected by the strength and precision of assembly, a delicate touch is essential. This is why humanoid robots capable of thinking like humans and handling even the smallest parts with human-like dexterity are needed.

Once the final challenge of fully automating the assembly process is achieved, automakers can significantly reduce labor costs, which account for up to 10% of total manufacturing costs. Given that the global automotive industry's operating margin is currently around 10% at most, a 10% reduction in costs is highly significant.

With 100% automation, manufacturers can also mitigate labor-management risks.

Robots do not require wage increases, nor do they cause production losses due to strikes. Manufacturers can freely adjust production speeds without negotiating with labor unions, and 24-hour production is possible, including weekends and nights. For this reason, traditional automakers are actively introducing humanoid robots, even while being mindful of union reactions. Labor cost reduction is a key strategy for competing with Chinese companies on production costs.

Export cars are parked at Pyeongtaek Port in Gyeonggi Province. Photo by Yonhap News

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Cost reduction through robot adoption also reduces tariff risks. Global automakers have established production bases in emerging markets mainly to reduce labor costs. By manufacturing parts or complete vehicles in countries with lower labor costs and exporting them to developed markets, manufacturers have been able to increase profits. However, this supply chain value model has recently been disrupted. The Trump administration in the U.S. raised tariff barriers on vehicles and parts imported into the U.S. as part of its protectionist trade policy.

In the past, China was the global production base for the automotive market. Parts were manufactured in China at low labor costs, shipped to factories in the U.S. and Europe for final assembly, and then sold in those markets. Now, the U.S. imposes a 15% tariff on imported finished vehicles and parts, breaking this pattern. With even higher tariffs anticipated for China, the automotive parts industry, which is highly dependent on China, now faces the need to restructure its supply chain.

Hyundai Motor Group Chairman Chung Euisun is taking a commemorative photo with Brian Kemp, Governor of Georgia, at the completion ceremony of 'Hyundai Motor Group Metaplant America' (HMGMA) held in Ellabell, Georgia, USA, last March. Photo by Yonhap News

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However, if labor costs can be reduced by 10% through the adoption of humanoid robots, there is no longer a need to build production plants in emerging markets. Cars sold in the U.S. can be produced at U.S. plants, and those sold in Europe at European plants, reducing not only labor costs but also logistics and transportation expenses. For this reason, traditional automakers are treating the introduction of humanoid robots as a foregone conclusion in the near future.

According to Samsung Securities, the estimated hourly maintenance cost of a humanoid robot is about $3.4. This figure assumes a $100,000 robot deployed in a factory 24 hours a day for five years, including costs for autonomous driving software (FSD) subscriptions and battery replacements. So, what is the current hourly labor cost for Chinese automotive manufacturers?

According to the Harbor Report published by global consulting firm Oliver Wyman, the average labor cost per vehicle for Chinese automakers is $585. Assuming a total labor time of 160 to 190 hours per vehicle, the hourly labor cost comes to about $3.6 to $3.7. In the end, deploying humanoid robots (at $3.4 per hour) results in labor costs comparable to, or even lower than, those in China.

Hyundai Motor Group's humanoid robot business is well positioned for success. Once the robots are commercialized, there is a clear customer base. They can be deployed first at Hyundai and Kia's overseas plants, and potentially at domestic factories as well. There are also opportunities to supply robots to global plants of GM, with whom Hyundai is allied and discussing various production strategies, and Toyota, which has announced joint development of AI robots with BD.

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To this end, Hyundai Motor Group is building a robust supply value chain. Its core affiliate, Hyundai Mobis, is responsible for developing and manufacturing actuators-the key technology for humanoid robot hardware. The core chips powering BD's humanoid robots will be supplied by NVIDIA. In March of this year, BD also announced plans to advance next-generation AI technology using NVIDIA's high-performance computing platform, Jetson Thor.

Additionally, Hyundai Motor Group is developing custom batteries for robots in partnership with Samsung SDI. The goal is to create lightweight, high-energy-density batteries that can be installed in various robot designs. Hyundai Motor Group is also preparing for BD's NASDAQ listing and has large-scale funding plans. By securing capital through the financial markets, Hyundai Motor Group's direct investment burden will be greatly reduced. This will enable continuous R&D and is expected to positively impact the securing of new growth engines for the business.