By CHEN Huidong and YIN Jingfei

A rumor that Sanhua Intelligent Controls Co Ltd had secured a 50 billion yuan (about US$7 billion) order from Tesla for humanoid robot components sent its shares sharply higher in October, before the Chinese supplier denied the claim. The stock has since eased but remains well above September levels, highlighting how expectations around China's humanoid robot sector are outpacing commercial reality.

Sanhua, best known for thermal management parts used in air conditioners and electric vehicles, is pushing into robotics by developing actuators – joint components critical for robot movement. Analysts at Minsheng Securities and CICC say the shift builds on its precision engineering strengths and has helped fuel market enthusiasm.

The company has built a robotics R&D team of over 180 engineers and plans new facilities in Hangzhou, China, and in Mexico. It has not disclosed production capacity or customer details, but some investors have speculated the Hangzhou site could eventually produce 1 million actuators a year. Sanhua has not confirmed any such targets.

The rumor spread as retail investors piled into robotics stocks. Sanhua's A-shares jumped nearly 60% between early September and mid-October, with daily turnover tripling. Trading data showed strong participation from short-term retail funds.

At the same time, Zhejiang Sanhua Green Energy Industrial Group, the company's second-largest shareholder, sold 13.5 million shares. Global investors including Schroders and Baillie Gifford also trimmed stakes in its Hong Kong-listed unit. In response to growing volatility, Sanhua raised the ceiling of its share buyback program to 60 yuan and extended it to February 2026.

China's "Robot Plus Application Action Plan," launched in early 2023, has spurred local governments and manufacturers to invest in robotics, particularly humanoid models that use dozens of actuators per unit.

But industry executives say commercial use remains limited. "In factories, wheels and robotic arms are enough. For consumers, humanoid robots are still more of a showcase for AI," said XIE Ling, a robotics engineer in Nanjing. Hardware is no longer the main barrier, he added, noting "what matters now is not capability, but commitment of capital — who is willing to invest heavily in testing and scaling."

Industry executives also rejected talk that Tesla could roll out 50,000 Optimus robots by 2026, with one listed-robotics company executive calling the forecast "unrealistic" and saying commercial demand is unlikely to emerge for at least three years.

ZHANG Xiaorong at the DeepTech Research Institute said Sanhua's positioning in actuators gives it a technical edge, but the market is too nascent for this to be reflected in earnings, and its current 4.5% R&D spend remains largely unchanged. With profits still distant, bets on robot makers like Sanhua are built more on potential than performance.