Tesla Optimus Production Begins, Profits Drop 43%
Original: Tesla starts Optimus robot production in California as profit falls 43%
Why This Matters
Tesla's shift from EV maker to robotics firm carries major industrial and labor implications.
Tesla began producing Optimus humanoid robots at its Fremont, CA factory in Q3 2026, converting former EV floor space. Net income fell 43% YoY to $787M as AI and robotics spending surged. Musk targets 20,000 units/week by end of 2027.
Tesla officially started production of its Optimus humanoid robot at the Fremont, California factory—repurposing space once used for EV manufacturing. The company called these "the first production-quality bots" it has manufactured, noting the process is now suitable for a commercial product, per its Q3 shareholder letter.
CEO Elon Musk described it as "early production" and warned the ramp will be "slow and somewhat bumpy" given how novel the product is. He still committed to hitting 20,000 units per week by end of 2027, while acknowledging ongoing design and AI work remains before the robot can reliably handle open-ended tasks.
The robotics push came at a cost. Net income fell 43% year-over-year to $787 million, down from $1.37 billion in Q3 2025. Total revenue was essentially flat at $28.04 billion. EV sales held steady at $20 billion, with 486,532 vehicles delivered—slightly more than Q2 but below the prior year's pace. The solar and energy storage segment dropped 16% YoY to $2.8 billion, attributed to tariff-related customer refunds. The bright spot: Tesla's services business, including Full Self-Driving subscriptions, grew 33% YoY to $4.6 billion and posted a record $734 million in gross profit.