Tesla dominated the electrical car business by the mid-2010s with smooth, quick cars that helped fight the general public notion that EVs have been severely restricted by quick ranges.
Now the corporate – and its controversial CEO, Elon Musk – face stiffer competitors and political headwinds. Its EV sales fell by a document 9% in 2025, amid growing rivalry from China and the expiration of the US EV gross sales tax credit score.
But Musk has been steering the corporate towards an audacious wager. He believes Tesla’s future gained’t journey on cars however on humanoid robots.
On Tesla’s earnings name on Wednesday, Musk laid out a literal alternative of Tesla cars by robots – asserting Tesla would discontinue the Model S and Model X in favor of creating extra of its Optimus robots.
“We’re gonna take the Model S and X production space in our Fremont factory and convert that into an Optimus factory … with the long-term goal of having 1 million units a year of Optimus robots in the current SX space in Fremont,” he mentioned.
It’s the quintessential, science-fiction dream of the future: Musk says Tesla’s Optimus robots, will do every thing from clear your home to carry out surgical procedure.
He’s known as Optimus the important thing to eliminating world poverty, making human work optionally available and reaching Mars.
“Every human on earth is going to have their own personal R2-D2, C3PO,” Musk mentioned in November, referring to the private robots from Star Wars. “But actually, Optimus will be better than that.”
But critics say these are fever-dream distractions from Tesla’s core automotive enterprise. And loads of corporations, like Boston Dynamics and Figure, are already deep into the humanoid robotic enterprise.
Musk’s personal success and pay are instantly at stake. Tesla should ship a million Optimus robots inside 10 years for Musk to totally understand an almost $1 trillion Tesla pay plan accredited by shareholders late final 12 months.
“Elon is a big thinker, and he wants to be pushing the edge of people’s imagination,” a former Tesla senior engineer instructed NCS in an interview.
But the EV and robotic markets are very totally different, the engineer mentioned. “With electric vehicles, Tesla was really the only one working on this hard problem. There’s a lot of companies now and tons of competition.”
Tesla first unveiled its humanoid robotic challenge at a 2021 event, the place a silvery determine danced to thumping techno music on a stage. It was an actor in a robotic swimsuit, full with a face that seemed like a display. “Obviously, that’s not real,” Musk mentioned because the costumed determine left the stage.
Just months later, in January 2022, Musk mentioned he thought Optimus might be “more significant than the vehicle business” for Tesla over time.
Tesla says Optimus can now type objects, serve popcorn, throw out trash and dance. It does “some basic tasks in the factory,” Musk mentioned Wednesday – progress, however nonetheless a far cry from Musk’s futuristic imaginative and prescient – whilst he predicted Optimus might ultimately generate $10 trillion of income.
It’s a lofty objective, one specialists say could also be harder than Musk’s bets on electrical autos or SpaceX. Humanoid robots are among the many most complicated machines possible, and the race to construct them is already heating up.
Tesla is not the one firm on this house. Hyundai and Google DeepMind are additionally deploying their Atlas humanoid robotic internally within the coming months earlier than rolling it out to prospects. Meanwhile the CES tech show in January was filled with corporations — together with Nvidia, Qualcomm and Intel — displaying off humanoid robots powered by their chips and applied sciences.
More than 90 corporations have a humanoid robotic product, in response to Ani Kelkar, a associate at McKinsey & Company who leads the corporations’ superior automation and autonomy sector. More are coming, particularly within the United States and China.
Experts from McKinsey, Goldman Sachs and Morgan Stanley estimate the humanoid robotic market might ultimately be value wherever from $370 billion by 2040 to $5 trillion by 2050.
Tesla does have crucial benefits in its experience in motors, batteries and mechanisms, mentioned Ken Goldberg, a professor who supervises analysis in robotics and automation at the University of California, Berkeley.
“They also understand how to make something advanced in high volume – with cost effectiveness, and that’s really important,” Goldberg mentioned.
The firm might additionally profit from utilizing Optimus internally and promoting it externally, giving it a “cost advantage” that would see Tesla making “several thousand dollars per robot,” Goldman Sachs mentioned in an October report.
But most specialists agree it’ll be at least a decade earlier than humanoid robots are extensively deployed.
“A giant leap may happen, but we don’t know when,” Goldberg mentioned. “Most technology develops as a slow burn over time, so I think the expectations about having fully general humanoids seems over-inflated.”
Others are skeptical about whether or not humanoid robots will ever be broadly helpful in society. Bill Ray, an analyst following rising applied sciences and robotics for market analysis agency Gartner, beforehand instructed NCS that humanoid robots face too many limitations to be sensible.
Musk has swung large with timelines earlier than – and missed. He beforehand mentioned Tesla cars could be totally autonomous by 2018 that SpaceX would begin sending rockets to Mars by 2018 – neither of which have occurred but.
And already with Optimus, Tesla has missed its chief’s formidable schedule. Musk had initially set inside objectives for Tesla to supply at least 5,000 Optimus models in 2025, in response to The Information. That objective was slashed to 2,000 a couple of months later and has been lowered once more since, The Information reported in October. Tesla didn’t reply to NCS’s request for remark.
Musk has acknowledged his objectives usually are not straightforward.
“Right now, we’re struggling with the final design of the hardware,” particularly of the arm and hand, Musk mentioned at the All In Summit in September. Human-like fingers are notoriously arduous for robots to emulate. Unlike folks, robots have a tough time figuring out the best way to grip totally different objects like a moist glass versus a chunk of steel.
“People think of space travel as extraordinarily difficult and it is, no doubt, but it turns out that getting a robot to reliably tie a sneaker is harder than getting a rocket out of the atmosphere,” Goldberg mentioned.
Musk’s political commentary and assist of President Donald Trump has additionally made him a polarizing determine, leading to protests and vandalism at Tesla dealerships throughout the nation.
“If they won’t buy his cars, why would they buy a huge robot for their home from him?” posted Ross Gerber, an early Tesla investor and CEO of funding agency Gerber Kawasaki, who is now a distinguished critic of Musk.
Musk acknowledged the “many who doubt our ambitions for creating amazing abundance” on Wednesday’s earnings name.
“But we’re confident it can be done, and that we’re making the right moves technologically to ensure that it does. And Tesla’s obviously never been a company to shy away from solving some of the hardest problems,” he added.
But Musk’s model of the future gained’t occur immediately – and possibly not for a very long time.
“Elon is a visionary, but he promises things that sometimes may take more time than his engineers can deliver,” mentioned Goldberg. “The research community all over the world is working very hard on this, but it’s not going to get solved overnight.”