I Toured Unitree's Factory. I'm More Bullish on the West Than Ever.

On Wednesday I toured Unitree's factory in Hangzhou, and I wasn't allowed to take pictures. In the building that makes the actuators, the motors that drive every joint, there were one or two new automated lines. The rest of the floor was filled with humans operating old-school winding machines. (Winding means wrapping copper wire around a motor's core.) I don't know what percentage of the motors are made on the automated lines. But staffing the floor with humans made sense.

Unitree has a viral video (28 million views) of a humanoid doing assembly in its own factory, which it calls "an actual deployment". Its IPO prospectus calls it a pilot, and says assembly is "currently mainly manual". At the end of 2025 all of Unitree's machinery was worth about $1.7 million on its books, at a company that made almost 32,000 robots that year: some $50 of machinery per robot!

It doesn't need more. Labour was 8% of what it cost Unitree to make its robots in 2025, outsourced assemblers included, and most of the rest was parts. With those hands it made about 26,000 robot dogs in 2025, more than the roughly 20,000 IDC reckons the whole world shipped the year before.

So there's only so much a machine can save: halve a cost that's 8% of the bill and you save 4%. Unitree expects the motor line it's building to cut the labour in each motor by more than half, and the cost of one robot model by under 2%. Its labour per robot had roughly halved since 2023 (our arithmetic), and the filing credits scale, standardised processes and more skilled staff. None of those is a machine; two are kaizen, and I named my company, KAIKAKU, after the other word.

The other reason Unitree builds by hand starts in the showroom. Our host told us Unitree's CEO, Wang Xingxing, asked a G1 running GPT-6 to fetch him a bottle of water from another room. It did. Slowly. Unitree's own slide puts robots' "ChatGPT moment", when they can do 80% of tasks they've never seen 80% of the time, another two or three years away.

Until then, humanoids are mostly toys for researchers: our host named Nvidia, Amazon, Meta and universities. Three quarters of Unitree's humanoid revenue came from research and education in the first nine months of 2025, and under 5% from factories or other industrial work (half or more of what Unitree files as "industry" is robots giving guided tours at companies!). When someone asked what the GD01, a rideable mecha from $650,000, is for, the answer was that Wang had wanted one since he was a child.

A product without a job changes every year, and a custom machine only works if the product is kind of frozen, so a machine built for this year's robot is scrap next year. It's like tailoring a suit for a teenager. Right now everything's ever-changing, except the motor. Unitree is automating its joint modules first because they're the parts its robots share most. The same Wednesday I toured his factory, Wang told a conference in Wuzhen that Unitree had spent ten years on the robot's body and would now put its weight on the brain. When I toured a drone factory, the circuit boards and motors were made by machine and final assembly was done by hand. In a drone the motor is a whole component; in a humanoid it's half of one, the copper-and-magnets half, and that half has stopped changing, like the AA battery in a toy that's redesigned every Christmas.

In May I said China's new factories "bolt robots into every one" and the West should "erase the factory floor". The first bit wasn't true of the plant I visited. For now Unitree is right. The second bit I still believe. Automation has always needed a frozen part, and AI is unfreezing it, which is why I left Hangzhou more bullish on the West than ever: once machines can keep up with a changing product, the countries short of hands automate first, and the West builds the machines.

Ford's first line had no machine in it#

Ford's first moving assembly line, at Highland Park in 1913, put the magnets on Model T flywheels to make magnetos, small magnet-and-coil generators, kin to the motors on Unitree's winding floor. The work was split into 29 operations, each worker doing, in Ford's words, "as nearly as possible only one thing with only one movement".

The machines came once Ford froze the Model T, and by 1914 Highland Park was full of special machine tools. When the Model A replaced the T in 1927, Ford shut its plants for six months and rebuilt or scrapped most of its machine tools, and Chevrolet outsold it for the first time. A year later GM changed a Chevrolet model in three weeks. Unitree, with a new robot every year, is GM in 1927, not Ford. In 2011 Foxconn's Terry Gou promised a million robots within three years; by late 2016 Foxconn had about 40,000, and said it was slowing down "because humans are cheaper and more flexible to adapt to an ever-shorter life cycle of consumer products".

A robot is like a piano: most of the cost is the pianist. Programming and integrating a robot is typically 50 to 70% of the cost of the application, and every redesign means paying the pianist again. When GM put robots into its Hamtramck plant in the 1980s, they reportedly attached Buick bumpers to Cadillacs because they couldn't tell the cars apart.

When hands get too pricey, a factory has three doors:

• Organise them better, as Ford and Foxconn did in their heyday and Unitree does now.
• Find cheaper hands elsewhere.
• Automate the work away, which has always needed a frozen part (AI is ending that).

America shuts the cheap doors#

An hour of factory work costs about six times as much in America as in China (our estimate), so at American wages labour would be about 40% of Unitree's costs, not 8%. In Hangzhou labour is the tip on Unitree's bill; in America it would be the main course. And moving won't help: Chinese hands are being shut out.

America has run this experiment before. In 1964 about half a million Mexican farmworkers were shut out. In 1965, 20% of California's tomatoes were picked by machine; by 1970 the figure was 99.9%. The tomato was bred to be tougher and squarer, so the machine could pick it. The product froze to fit the machine.

In July the FCC stopped approving new humanoids and robot dogs unless they're made in America with more than 65% American parts by cost (75% from 2029).

The Pentagon goes further for the drones its programme buys: from August 2027, their stators have to be wound outside China and a handful of other countries.

How the West wins#

The motor line Unitree expects to save 1.7% of one robot model's cost would save about 9% at American wages. The machine is worth five or six times more in America than in Hangzhou, so the West can afford one nobody can switch off.

In the West, the volume is arriving:

• Figure claims its BotQ factory has gone from making one humanoid a day to one an hour in less than four months.
• Tesla says most of a line to build a million Optimus robots a year is at its Fremont plant.
• Agility, which makes its Digit humanoids at its own factory in Oregon, listed on Nasdaq on 5 November with Foxconn leading about $201 million of the money, though it sold just $1.8 million of robots last year.
• 1X says it makes its own motors, from a spool of copper to a finished actuator, on automated machines its engineers designed and built in Hayward, California.
• Westmag, a startup backed by Lux, Founders Fund and a16z, makes actuators for robots and motors for drones on a partly automated line.

Somebody has to build those lines, and we in the West are extremely good at building the machines that build things, even if China passed Germany as the top exporter of machine tools last year. America itself can't yet: on 28 October the White House found that it "relies on foreign imports for most types of robotics, industrial machinery, and their parts and components".

The country that's short of hands usually builds the machines. Labour-short Japan did it to America: GM bought the first Unimate industrial robot in 1961, Kawasaki licensed it in 1968, and by 1990 America's first robot makers had been sold to Europe. Now America is short of hands, and the machine builders are moving in: Mazak has built 40,000 machines in Kentucky, Yaskawa will make robots in Wisconsin, and Fanuc has bought a site in Michigan.

Then there are the pianists, who program the machines. Paying them is why a custom machine only made sense for a frozen product, and AI is cutting that bill. HD Hyundai and Palantir say AI agents cut the average time to fix a robot-programming issue from 21.5 days to 7.9. Apple estimated that it would have taken up to nine months to hire 8,700 industrial engineers in America, versus 15 days in China. China will have the same AI tools, but an engineer's time is three to five times more expensive in America, so each hour AI saves is worth that much more. The advantage China will lose quickest is its army of robot programmers.

Software went through all this first. Big programs used to be planned like factories: a change took months of programmers' time, so teams froze the spec and shipped once a year. These days a coding agent makes the change before lunch, and products ship every week. In my last essay I called the robot version agentic robotics, where a model writes the robot's program, runs it and fixes it itself. In October one agent taught itself to open, load and close an air fryer and then wrote about 1,500 lines of Python to do it again, in a single morning! The old way, a robot programmer wrote the program, signed it off and left it alone for the 12 to 15 years a robot lasts. With a program that costs a morning, nothing needs freezing, and the line can change whenever the product does.

China makes the magnets, but MP Materials has finished qualifying its magnets with GM, and its Texas plant begins deliveries before the end of 2026. BMW makes an EV motor in Steyr that uses no permanent magnets, and wants capacity for more than 100,000 of them this year. Good, because China picks who gets magnets: ask Japan, where China's dysprosium and terbium shipments have "virtually ground to a halt". I'd also circle 10 November, when Beijing's pause on its wider magnet rules runs out.

This is how we lose. By 2022, all of the top ten manufacturers of solar panel-making equipment were Chinese. China also makes many of the machines that build electric-car motors. Within a few years Chinese builders of hairpin winding lines caught up with German and Italian ones, with changeovers done in software, undercut them by as much as half, and have started exporting whole lines to Europe. The winder is a small part of a motor's cost, and American wages are high enough that even a winder at twice the price still saves 8 to 9% of the cost of a robot. What the West can't afford is one that's slow to change over.