Mitsubishi Motors shares surged as much as 17% in Tokyo on Friday after the automaker unveiled a deal with the University of Tokyo startup Highlanders to mass-produce humanoid robots, signaling a push beyond its core automotive business and reinforcing a broader trend we have highlighted that could sweep across the global auto industry.

Highlanders signed an MOU with Mitsubishi Motors to develop humanoid robots for automotive factories and mass production at Mitsubishi's Kyoto plant as early as 2027. Early production runs could amount to 1,000 per month. 

The Japanese automaker plans to test the humanoids in its own facilities to address labor shortages and increasingly complex manufacturing, using operational data to guide a broader rollout. Mitsubishi has already invested in Highlanders.

Citi analyst Arifumi Yoshida wrote in his first take that the partnership between Mitsubishi Motors and Highlanders is "positive" for the automaker's stock, as it signals a push into physical AI:

After the July 9 market close, Mitsubishi Motors announced an MOU with Short-Term View: Upside Highlanders, a University of Tokyo startup, for the mass production of Price (09 Jul 26 15:30) ¥330.6 humanoid robots at its Kyoto plant. Production will begin in early 2027, Target price ¥420.0 with monthly production capacity of c1,000 units prepared. Highlanders will handle development and sales, while Mitsubishi Motors will leverage Expected share price return 27.0% its automotive production expertise in quality and other areas to provide Expected dividend yield 3.0% production and development support. Mitsubishi Motors has invested in Expected total return 30.1% Highlanders and is considering additional investment. The company plans Market Cap ¥442,459M to utilize the robots in Mitsubishi Motors factories while marketing them US$2,742M as Japan-originated physical AI products to diverse industries domestically and internationally. Multiple inquiries have already been received. We believe the stock market will welcome this initiative to expand its automotive business expertise into physical AI, which has also been earmarked as a national priority.

Mitsubishi Motors shares in Tokyo closed up 10% on Friday but remain at 2022 lows.

In recent weeks, Bernstein analyst Eunice Lee pointed out, "OEMs are entering humanoid robotics to boost productivity and unlock new revenue streams." Read the note here.

Lee noted, "Automakers have several advantages across hardware, software, and scale. There is significant overlap between vehicle and humanoid components—motors, reducers, sensors —as well as manufacturing."

It appears that Mitsubishi Motors is following other automakers, including Tesla and several Chinese companies, in making a big push into humanoid robotics development and mass production. EVs and humanoid robots share similar component ecosystems, manufacturing processes, and supply chains, giving automakers a potential advantage in scaling up production.

Here is a complete overview of the automakers developing humanoid robots:

Humanoid production ramps globally begin next year. Read report.

Does this suggest that legacy US automakers will eventually partner with humanoid robotics firms? What about Rivian and Lucid? The race for physical AI is underway.