Musk’s Robot Revolution: Can Tesla Deliver on the Hype?

Tesla’s stock experienced a rise on Monday, attributed to Elon Musk’s promotion of the company’s humanoid robots’ potential value.

Musk announced on social media that Tesla expects to have “genuinely useful humanoid robots” in low production for internal use next year, with hopes for high production available to other companies by 2026. During Tesla’s annual meeting in April, he had stated that the robots, named Optimus, would enter limited production by 2025, projecting that over 1,000 units would be operational within the company by year’s end. Currently, two robots are active on the factory floor, although Tesla has not disclosed their specific functions.

Musk has speculated that the introduction of these robots could potentially add $20 trillion to Tesla’s market capitalization. However, these robots are not expected to be available for sale until late 2025, with anticipated prices ranging between $20,000 and $30,000.

There is some ambiguity surrounding Musk’s claim of the robots being “genuinely useful,” as prior demonstrations have been met with skepticism. In May, Tesla faced criticism for releasing a video that appeared to show an Optimus robot folding a shirt, which was later revealed to be controlled by a person off-screen.

Tesla has previously been accused of using misleading presentations to promote its robots. The company’s debut of the Optimus robot project in 2021 included a live performance featuring a person in a costume.

Analyst Craig Irwin from Roth MKM commented on Yahoo Finance, expressing doubts about Tesla’s ability to meet the ambitious timeline and compete with established robotics firms, particularly Boston Dynamics, pointing out that their current technology seems outdated.

In addition to Boston Dynamics, Tesla faces competition from Honda and Apptronik in Japan. Chinese companies like Dongfeng Motor and Nio are testing humanoid robots developed by UBTech Robotics in their production lines, while BMW has been integrating humanoid robots from Silicon Valley-based Figure since January.

Following Musk’s remarks, Tesla’s stock rose over 3% on Monday. The shares have remained steady year-to-date after a significant recovery in the past couple of months. Tesla is set to report its second-quarter earnings on Tuesday, during which Musk is anticipated to address the delayed unveiling of the company’s robotaxi project.

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