Elon Musk: 80% of Tesla's Future Value from Optimus Robots Amid EV Sales Slump
Key Takeaways
- 🤖 Musk claims Optimus robots will eventually represent 80% of Tesla's total value
- 📉 Tesla facing significant EV sales decline due to competition and aging lineup
- 🏭 First Optimus units planned for factory work in 2025-2026 timeframe
- 🤼 Facing strong competition from established robotics companies
- 📊 Wall Street remains skeptical with "Hold" rating on TSLA stock
Musk's Bold Prediction on Tesla's Robot Future
So I've been following Tesla's transition from car company to robotics firm, and Elon Musk just dropped another bombshell. On Monday, he claimed that approximately 80% of Tesla's value will eventually come from their Optimus humanoid robot project . This isn't the first time he's made big claims about Optimus - back in mid-2024, he said these robots could eventually make Tesla a $25 trillion company .
That $25 trillion figure is absolutely mind-blowing when you think about it. That would equal more than half the value of the entire S&P 500 at the time he made that statement . Musk's been really pushing this narrative while Tesla's core auto business faces some serious headwinds. It's clear he's trying to shift investor focus to what he sees as Tesla's future rather than it's present struggles.
The timing of this announcement is interesting too - it came right after Tesla published their latest "master plan" which mentioned robots for the first time . I think Musk's trying to counter all the negative news about declining car sales with this optimistic vision of a robot-powered future.
Why Tesla is Pivoting to Robots Amid EV Struggles
Tesla's automotive business is facing some real challenges right now. In the second quarter, automotive revenue made up about 74% of total sales, but profits were down as vehicle sales continue to slide . They're dealing with increased competition from lower-cost Chinese EV makers, an aging vehicle lineup, and some negative publicity around Musk's political involvements .
There's also new US legislation that's gonna reduce electric vehicle incentives, which Musk has been critical of . All these factors have created what multiple sources are calling a "multi-quarter sales slump" . The stock's down about 19% year-to-date, trading around $329 as of Tuesday .
In this context, Musk's robot focus starts to make more sense. He's basically trying to pivot Wall Street's attention from Tesla's current problems to it's future potential. Instead of valuing Tesla as just another automaker, he wants investors to see it as an AI and robotics company that happens to make cars. It's a smart strategic move, but whether investors will buy into this vision remains to be seen.
Optimus Development Timeline and Production Goals
Tesla's been working on Optimus since first introducing the concept back in 2021 . We're now on the second iteration of the robot, with the Optimus V3 prototype due to launch by the end of this year . Musk says Tesla aims to produce about 5,000 Optimus robots this year .
The production plan involves getting the pilot production line setup at Tesla's Fremont facility in 2025 . Musk has suggested that Tesla could eventually scale production to 1 million units per year within the next five years . That's an insane ramp-up if they can pull it off.
As for when we might actually see Optimus robots in commercial use, Musk gave a "very rough guess" back in January that Tesla could begin delivering robots to other companies in the second half of 2026 . The initial use cases will likely be factory work, with Piper Sandler analysts predicting Optimus could be "staging parts within Tesla's facilities" by next year .
Table: Tesla Optimus Development Timeline
The Humanoid Robot Competition Heats Up
While Musk talks a big game about Optimus, Tesla's actually playing catchup in some key areas. The humanoid robot space has gotten alot more crowded recently. Chinese company Unitree has been making waves - they won multiple medals at the World Humanoid Robot Games . Then you've got established players like Boston Dynamics, who've been doing this alot longer than Tesla.
Other serious competitors include Agility Robotics, Apptronik, 1X, and Figure . These companies aren't just working on concepts - some have actual working prototypes doing real tasks. The competition in robotics is actually pretty fierce when you look beyond Musk's announcements.
In the autonomous vehicle space (which is related tech), Tesla's also behind. Waymo by Alphabet's already operating in multiple markets and hit 10 million paid trips back in May . Baidu's Apollo Go is live in China too. Tesla's only recently started testing their robotaxis in Austin and San Francisco .
What might give Tesla an advantage is there vertical integration approach. They're developing the AI, the hardware, and have potential manufacturing capacity. But they're definitely not the only player in this game, despite what Musk's comments might suggest.
Tesla's Current Challenges and Leadership Changes
Beyond the sales slump, Tesla's facing some other significant challenges. There's been some important leadership departures recently. Milan Kovac, who was Tesla's vice president of Optimus robotics, left the company in June after nine years there . Losing key people from critical projects never looks good.
There's also this weird issue with charging cable theft that's popping up. Apparently Tesla owners are waking up to find there charging cables cut off and stolen, probably for the copper inside . There's been 83 chargers vandalized in the Minneapolis-St. Paul area alone, costing about $46,000 in repairs . It's not a huge financial hit for a company Tesla's size, but it's another headache they don't need.
Internationally, Tesla's facing sales challenges in several key markets. According to one report, sales are "faltering" in Sweden, China, and India . These are all important markets for EV growth, so that's concerning for Tesla's core automotive business.
All these issues make Musk's robot focus seem like a strategic diversion. When your current business is struggling, it's convenient to talk about future technologies that might save the day somewhere down the road.
What Wall Street Thinks About Musk's Robot Vision
Analysts seem pretty skeptical about Musk's Optimus claims. The current consensus rating on Tesla stock is "Hold" based on 13 Buys, 15 Holds, and 8 Sells . After a 58.53% rally in share price over the past year, the average price target of $306.42 implies about 6.93% downside from current levels .
Some analysts have tried to put numbers on Optimus's potential. Piper Sandler thinks Tesla could price Optimus at around $100,000 per unit if it can work 18-hour shifts . Morgan Stanley estimates Tesla could replace 10% of its own staff with Optimus robots, saving about $2.5 billion .
But these are all speculative estimates. The reality is that Optimus isn't generating any meaningful revenue yet, and won't for the forseeable future. Meanwhile, Tesla's core automotive business is facing real challenges that are affecting current financial performance.
Wall Street tends to discount future potential when it's uncertain and far out. That's probably why we're not seeing analyst upgrades based solely on Musk's Optimus comments. They want to see actual commercial deployments and revenue before adjusting their valuation models.
Why Optimus Might Actually Work for Tesla
Despite all the skepticism, there are some reasons why Musk's Optimus vision might not be completely crazy. Tesla does have legit AI capabilities that could transfer well to robotics. Musk emphasized on Tesla's Q2 call that "Tesla is by far the best in the world at real-world AI" . That's debatable, but they certainly have substantial real-world driving data.
The potential market is enormous if they can crack humanoid robotics. Musk has suggested that if Tesla could eventually manufacture a billion Optimus units annually, it could generate upwards of $30 trillion in revenue . That's fantasy numbers right now, but even a small slice of that market would be huge.
Tesla's also planning to integrate AI models like Grok from Musk's xAI startup into Optimus . That could potentially enhance it's usefulness beyond what more specialized robots can do. The vertical integration approach might give them an advantage too.
From a timing perspective, the labor market might be ready for humanoid robots. With workforce shortages in many industries and rising labor costs, there could be genuine demand for robotic workers that can perform tedious tasks reliably. If Optimus can actually deliver on it's promise, the commercial applications are virtually endless.
Frequently Asked Questions
When will Optimus robots actually be available?
Musk has given a "very rough guess" that Tesla could begin delivering Optimus robots to other companies in the second half of 2026 . But given Tesla's history of missing timelines, I'd take that with a grain of salt.
How much will Optimus cost?
Analysts at Piper Sandler think Tesla could price Optimus at around $100,000 per unit if it can work 18-hour shifts . That's actually reasonable compared to human labor costs over time.
What can Optimus actually do right now?
The current Optimus prototypes are in development. Tesla plans to have them doing factory work at Tesla facilities first . Basic tasks like moving parts between work stations are likely the initial use cases.
Who is Tesla's main competition in humanoid robots?
Chinese company Unitree is looking strong, plus established players like Boston Dynamics, Agility Robotics, Apptronik, 1X and Figure . It's getting crowded in this space.
Should I invest in Tesla based on Optimus potential?
Most analysts have a "Hold" rating on TSLA . Optimus is still speculative without revenue, so investing based solely on robot potential seems risky right now. The core auto business has real challenges too.