Musk: Optimus will be Tesla’s hardest product to scale

Elon Musk warned investors on Tesla’s second-quarter earnings call that Optimus, the company’s humanoid robot, will be “the hardest product to scale manufacturing that we’ve ever made at Tesla.” He emphasized that every component is new and there is no existing supply chain to draw from, urging investors to “calibrate people correctly” on expectations. The initial production ramp will follow a normal curve, Musk said, but with a flat early stretch that could last longer than many hope. Tesla also quietly dropped references to Optimus mass production from its Q2 shareholder presentation, after using that language as recently as the first quarter.

This marks a notable shift in tone from earlier quarters. Last year, Musk predicted he would be “shocked” if Tesla were not producing 100,000 Optimus robots per month within five years. In January 2025, he projected 50,000 to 100,000 units for 2026. By January of this year, however, he acknowledged that zero Optimus robots were doing useful work in Tesla’s factories. The more than one thousand Gen 3 units deployed across Fremont and Gigafactory Texas are collecting training data, not performing productive tasks.

Musk was candid about the engineering hurdles. He said Optimus needs at least human-level dexterity before it can be useful outside controlled factory settings, calling the human hand “an incredible thing” that no robotics company has managed to replicate. Tesla must also solve memory, logic, and chip packaging challenges while securing AI processors from partners including Samsung and TSMC. The robot contains roughly 10,000 unique parts. Unlike Chinese competitors that can tap an existing smartphone supply chain for actuators and precision motors, Tesla is building its manufacturing base from scratch.

The financial backdrop adds pressure. Tesla reported Q2 revenue of $28 billion, up 26 percent, but adjusted earnings of 33 cents per share badly missed the 51 cents analysts expected, and operating income fell 57 percent. Capital expenditure jumped to nearly $6 billion in the quarter, part of Tesla’s $25 billion full-year spending plan. This pushed free cash flow to a negative $1 billion and sent shares down about seven percent in pre-market trading on Wednesday.

Musk’s compensation deal ties part of his payout to delivering one million Optimus robots within a decade, a target that now sits uncomfortably against his own warnings about how difficult scaling will be. Tesla has converted its Fremont Model S and Model X lines for Optimus production and is building a dedicated facility near Gigafactory Texas, but the company has stopped promising when volume output will begin. Tesla’s China president has described the Shanghai Gigafactory as a “golden key” to mass-producing Optimus, though that factory has not yet begun robotics manufacturing either.