Tesla has started producing its Optimus humanoid robot at its Fremont, California plant, in a space that until recently built electric vehicles. The company said in its shareholder letter for the third quarter that the robots coming off the line are "the first production-quality bots" it has made, and that the current process is "suitable for a commercial product." The changeover was fast: according to a report cited by specialist sites, Tesla dismantled the former Model S/X line in just 46 days to make room for Optimus.
Tesla Optimus at Fremont: Gen 3 Humanoid Deployment & Mass Production ...
On the earnings call, Elon Musk called this "early production" and warned that the ramp will be slow and "somewhat bumpy because it is such a radically new product." He nonetheless claimed Tesla could reach 20,000 robots per week by the end of 2027, a target that for now rests on his own statement. He also acknowledged that the design still needs tweaking: the robot must be safe, reliable and durable, and not "wear out after a month." On AI, he said there is still a lot of work to make it truly useful for open-ended tasks. The industrial context is the race for humanoids, in which BYD has announced its Xiao Di robot to counter falling car sales.
Flat revenue, falling profit
The quarterly results show the cost of the bet. Total revenue was $28.04 billion, essentially unchanged from a year earlier. EV sales stayed flat at about $20 billion, while energy revenue fell 16% to $2.8 billion, due to tariff-related customer refunds. The services division held up, growing 33% to $4.6 billion, with a record $734 million in gross profit, driven by subscriptions to the Full Self-Driving software.
Spending weighed on results. Net income fell 43% to $787 million, down from $1.37 billion a year earlier and below analyst expectations. Investments in artificial intelligence, Optimus and autonomous driving played a part, along with lower regulatory credit sales. Capital expenditure reached $4.7 billion, more than double the previous year's level but still below estimates.
Unsupervised FSD slips again
On driving software, executives were upbeat, but the timeline for the "unsupervised" version has slipped again. Today owners can subscribe to the supervised version, which requires the driver to pay attention and be ready to take over. Ashok Elluswamy, Tesla's VP of AI software, said around the second quarter of next year is when some privately owned cars could receive the update enabling unsupervised driving. In April, Musk had pointed to the fourth quarter of this year.
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