By mid-2010s, Tesla held the commanding lead in the electric vehicle sector, thanks to slick, swift automobiles that helped counter the prevailing public perception that EVs were severely constrained by limited driving ranges.
Now, the company—and its often-controversial CEO, Elon Musk—are confronting mounting competition and political headwinds. EV sales experienced a record 9% drop in 2025 amidst intensifying rivalry from China and the phase-out of US EV sales tax credits.
However, Musk is steering the firm toward a bold gamble. He posits that Tesla’s future success will hinge not on automobiles, but on humanoid robots.
During Tesla’s earnings call on Wednesday, Musk presented a literal substitution for Tesla vehicles: announcing that Tesla would halt production of the Model S and Model X to prioritize manufacturing more of its Optimus robots.
“We are going to convert the Model S and X production space at our Fremont factory into an Optimus factory… with a long-term goal of achieving 1 million Optimus units annually in the existing SX space in Fremont,” he stated.
This is the ultimate, science-fiction vision of the future: Musk claims Tesla’s Optimus robots will perform everything from household chores to surgical procedures.
He characterized Optimus as the key to eradicating global poverty, rendering human labor optional, and facilitating travel to Mars. Furthermore, he asserts they will be commercially available by the close of 2027.
“Every single person on Earth will have their personal R2-D2, C3PO,” Musk remarked in November, referencing the iconic droids from “Star Wars.” “But really, Optimus will be better.”
However, critics suggest these are frantic distractions from Tesla’s core automotive business. Moreover, numerous firms, such as Boston Dynamics and Figure, are already deeply established in the humanoid robotics domain.
At stake is Musk’s own success and compensation package. Tesla must deliver one million Optimus robots within ten years for Musk to fully realize the nearly trillion-dollar pay package approved by shareholders late last year.
“Elon is a big thinker, and he wants to push the limits of people’s imagination,” a former senior Tesla engineer told CNN in an interview.
But the EV and robotics markets are vastly different, the engineer pointed out. “With electric vehicles, Tesla was essentially on its own tackling that complex problem. Now, there are numerous companies involved, and the competition is immense.”
“The Infinite Money Glitch”
Tesla first unveiled its humanoid robot project at a 2021 event, where a silver figure danced to heavy techno music on stage. It was an actor in a robot suit featuring a screen-like face. “Obviously, that wasn’t real,” Musk admitted as the suited figure exited the stage.
Just a few months later, in January 2022, Musk suggested that Optimus could eventually become “more meaningful to Tesla than the car business.”
Tesla now claims Optimus can sort items, serve popcorn, dispose of trash, and dance. It performs “some basic tasks on the factory floor,” Musk said Wednesday—progress, yet still distant from his futuristic aims, even as he previously forecast Optimus could generate revenues as high as $10 trillion.
Nevertheless, Musk has set an aggressive timeline for Optimus. At the World Economic Forum in January, he stated the robot would be ready for purchase by the end of 2027.
This is an ambitious target that experts believe could prove more challenging than Musk’s forecasts for EVs or SpaceX. Humanoid robots constitute some of the most intricate machinery, and the race to perfect them is already accelerating.
Tesla is not alone in this arena. Hyundai and Google DeepMind are also integrating their Atlas humanoid robot internally in the coming months before releasing it to customers. Meanwhile, the CES tech show in January was thronged with companies—including Nvidia, Qualcomm, and Intel—showcasing humanoid robots powered by their chips and technology.
Over 90 companies currently feature a humanoid robot product, according to Ania Kelkar, a partner at McKinsey & Company who leads the firm’s advanced automation and autonomy sector. More are emerging, particularly in the US and China.
Analysts from McKinsey, Goldman Sachs, and Morgan Stanley estimate the future humanoid robot market could eventually land anywhere between $370 billion by 2040 and potentially $5 trillion by 2050.
Tesla benefits from critical expertise in motors, batteries, and mechanical systems, noted Ken Goldberg, a professor overseeing robotics and automation research at UC Berkeley.
“They also understand how to manufacture something advanced at scale—with cost-efficiency, and that’s incredibly important,” Goldberg commented.
The company could also benefit from using Optimus internally while selling it externally, affording it a “cost advantage” that might allow Tesla to profit by “a few thousand dollars per robot,” according to an October report from Goldman Sachs.
But most experts agree that it will be at least a decade before humanoid robots become widely commonplace.
“There could be a massive leap, but we don’t know when,” Goldberg said. “Most technology develops through slow, incremental progress over time, so I think the expectations for having fully ordinary humanoids seem overstated.”
Others remain skeptical about whether humanoid robots will ever achieve widespread societal utility. Bill Ray, an analyst tracking emerging technology and robotics for the market research firm Gartner, previously told CNN that humanoids face too many constraints to be practical.
Optimus’s Challenges
Musk has already significantly intervened—and missed—prior timelines. He previously claimed Tesla vehicles would achieve full autonomy by 2018, and that SpaceX would begin launching rockets to Mars by 2018—yet neither has materialized yet.
And with Optimus, Tesla has already missed the leader’s own ambitious schedule. Musk initially set internal goals for Tesla to produce at least 5,000 Optimus units in 2025, according to The Information. This target was reportedly lowered to 2,000 within months and has been revised again since, The Information reported in October. CNN has not received comment from Tesla.
Musk has acknowledged his goals are not simple.
“We are currently battling the final hardware design,” particularly for the hands and arms, Musk said at the All-In Summit in September. Human-like hands are notoriously difficult for robots to replicate. Unlike humans, robots struggle with grasping diverse objects, such as a wet piece of glass or a metal ingot.
Musk’s political commentary and his endorsement of President Donald Trump have also made him a polarizing figure, leading to protests and vandalism at Tesla dealerships across the nation.
“If they aren’t buying his cars, why would they buy a massive home robot from him?” posted Ross Gerber, an early Tesla investor and CEO of Gerber Kawasaki Investment Management, who is now a notable Musk critic.
President Donald Trump, accompanied by Elon Musk, stands next to a Tesla Model S on the South Lawn of the White House on March 11, 2025. Andrew Harnik/Getty Images
Musk acknowledged the presence of “many who doubt our ambition to create amazing abundance” during Wednesday’s earnings call.
“But we are confident it is possible, and that we are taking the right technological steps to achieve it. And obviously, Tesla has never been a company that shies away from solving the hardest problems,” he added.
But Musk’s version of the future won’t materialize overnight—and perhaps not anytime soon.
“Elon is a visionary, but he promises things that can sometimes take longer than his engineers can deliver,” Goldberg concluded. “The global research community is working very hard on this, but it won’t be solved overnight.”
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