Tesla has begun production of its humanoid robot Optimus at its factory in Fremont, California, within a manufacturing space previously dedicated to electric vehicle production, according to the company's announcement in its third-quarter shareholder letter.
Tesla explained that the robots coming off this line represent the first production-quality units actually manufactured. Although the company continues to improve the hardware and manufacturing processes, it confirmed that the current process for producing Optimus has become suitable for a commercial product, with expectations for production rates to increase gradually given that it is an entirely new product.
Production Plans and Technical Challenges
Elon Musk, CEO of Tesla, confirmed during an earnings call with investors that this phase represents "early production" and will see slow acceleration, predicting that the company will be able to produce 20,000 robots per week by the end of 2027.
Musk pointed out that there are aspects requiring design adjustments and development to ensure the delivery of a robot characterized by safety, reliability, and long operational lifespan so it does not degrade quickly. He also noted that much work remains in the field of artificial intelligence for the robot to truly be capable of performing open-ended tasks.
Impact of Technical Investment on Financial Performance
Future development efforts were not enough to offset the company's mediocre financial results in the third quarter, as revenues remained stable while expenses jumped due to pressure to accelerate the development of Optimus robots, artificial intelligence, and autonomous driving projects, ultimately leading to a 43% drop in profits.
Tesla's total revenue in the third quarter reached $28.04 billion, recording a slight decline compared to the same period in 2025. The majority of revenue was driven by electric vehicle sales at $20 billion, while the solar energy and energy storage sector saw a 16% decline to reach $2.8 billion due to customer refunds related to tariffs. Conversely, the services sector, which includes full self-driving software subscriptions, grew by 33% to reach $4.6 billion.
Why This News Matters
The start of Optimus robot production represents a strategic shift for Tesla from the prototype phase to actual commercial production, placing hardware and artificial intelligence at the forefront of the company's future business model. Despite clear financial pressure and a 43% drop in profits resulting from pumping funds into these technologies, this development demonstrates the company's commercial commitment to expanding advanced automation and humanoid robotics amid ongoing technical and engineering challenges.