Toyota’s $6.4 Billion Robotics Estimate Puts Physical AI in the Spotlight

Toyota Motor estimates that expanding automation in its factories, group companies and major suppliers could require around 400,000 robots and an annual expenditure of around 1 trillion yen ($6.4 billion) from 2028.

The possible investment was discussed with investors in early September, according to Reuters. Toyota has not said whether the full investment will be made or how many years spending will remain at that level.

The 400,000 figure includes replacements of existing machines and new robot installations, spanning humanoid and non-humanoid systems. Potential investment covers industrial robots, automated logistics and future human-robot collaboration in factories.

Toyota already uses and tests robotics in various manufacturing processes. In its fiscal 2026 financial results, the company listed factory demonstrations involving transportation and parts picking, along with robotics work in areas such as transporting medical equipment.

Toyota builds on previous automation work

At Toyota’s Kamigo plant, a piston assembly line that began operating with robots in January 2025 has since moved from three operators to fully automated, according to Toyota’s 2025 integrated report.

Work on automation of the plant began much earlier. It began introducing robots on select sublines in 2008, but the company then encountered maintenance limitations as it expanded engine production overseas.

Toyota said some overseas facilities lacked enough trained maintenance workers to support the automated equipment. Consequently, some processes reverted to manual production, while manufacturing knowledge from Japanese plants was transferred to overseas sites.

Workers then developed jigs and tools that Toyota said could double or triple efficiency in some manually operated processes. The knowledge accumulated through that work was later used in the development of new automated production systems, including the piston assembly line at Kamigo.

Toyota is also developing systems that can manipulate parts without needing to precisely position them in advance. Its KumiPro parts-picking robot uses cameras to identify and manipulate freely placed components and is already operating on production lines at Toyota Motor East Japan.

Toyota has demonstrated an assembly process in which force feedback control compensates for recognition errors from the cameras. The robot can adjust its movement as it inserts components into tight spaces, compensating for differences between the camera’s recognition and the physical position of an object.

Toyota develops physical AI for production environments

Toyota uses the term Physical AI to describe the technology that allows robots to perceive their environment through sensors, learn or optimize their actions based on a situation, and operate autonomously.

Toyota said its Frontier Research Center is addressing labor shortages and skills transfer through robotics, including applications at production sites. The center’s work includes technologies developed through its Human Support Robot program.

Toyota said object recognition, decision-making and motion execution technologies from the Human Support Robot program have been applied to KumiPro at Toyota Motor East Japan.

Toyota is also developing ELEY, or Embodied Learning Robot for Enhanced Performance, for tasks that involve physical contact with objects and the surrounding environment. The robot uses two human-like arms and an omnidirectional moving base and is designed to cope with external forces that can occur when a machine encounters an object in a different position than expected.

Toyota has identified long-term reliability, repeatability to achieve precise positions, and the data infrastructure required for robot learning as areas that still need work. It plans to test ELEY in conditions closer to production sites and use successful and unsuccessful attempts as training data.

Toyota is separately using reinforcement learning to train humanoid robots in simulated environments before transferring the learned behavior to physical machines. The company runs thousands of simulated robot instances in parallel to speed up the learning process.

Toyota said movements that work in simulation do not always transfer directly to physical hardware because conditions such as sensor readings, floor friction and actuator behavior differ. Researchers introduce variations in those conditions during training and use data from physical robots to narrow what Toyota describes as the Sim2Real gap.

The Toyota Research Institute is also working with Boston Dynamics on AI control systems for the Atlas humanoid robot. In 2025, organizations demonstrated that Atlas completed a sequence of walking, lifting, sorting, and packing tasks using a single large behavioral model, with robotic skills added through human demonstrations.

Japan was the world’s second-largest market for industrial robots in 2024, with around 450,500 robots in operation and another 44,500 installed during the year, according to the International Federation of Robotics.

Japan’s automotive industry installed around 13,000 industrial robots in 2024, up 11% from the previous year and the highest annual total since 2020.

Toyota’s 400,000 estimate is broader than IFR’s industrial robot figures because it includes replacement equipment and multiple types of robots at Toyota, group companies and major suppliers.

Hyundai Motor Group has set a timetable for the deployment of humanoid robots in automobile production. It plans to introduce Atlas at Hyundai Motor Group Metaplant America in Savannah, Georgia, starting in 2028, initially for parts sequencing before expanding to component assembly starting in 2030.

Hyundai said it will expand Atlas to additional manufacturing processes after validating individual applications. The group has also set a goal of establishing an annual production capacity of up to 30,000 robots by 2028.

Boston Dynamics, which develops Atlas, is controlled by Hyundai Motor Group, which bought a majority stake in the robotics company in 2021. Boston Dynamics also works separately with the Toyota Research Institute, and the research partnership combines Atlas with TRI’s Large Behavior Models.

(Photo by HY ARTE)

See also: Gartner describes four levels of AI in warehouse automation

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