In its Q4 2025 earnings call, Tesla announced plans to repurpose Model S and X assembly lines at Fremont for 1 million Optimus 3 units annually and ramp high-volume Optimus V4 production at Giga Texas. CEO Elon Musk highlighted the robot's learning capabilities via observation and video, upcoming Gen 3 unveiling, and challenges like scaling amid Chinese competition, backed by $20 billion in 2026 capex.
Tesla is pivoting aggressively toward humanoid robotics with its Optimus project, as detailed in CEO Elon Musk's Q4 2025 earnings call comments and recent updates from Davos and X posts. The company will end Model S and X production at its Fremont, California factory in Q2 2026, converting the space into an Optimus facility targeting 1 million Optimus 3 units per year. "We are going to take the Model S and X production space in our Fremont factory and convert that into an Optimus factory," Musk stated, expressing confidence in achieving the volume goal.
Separately, high-volume production of Optimus V4 will shift to Giga Texas, building on low-volume output at Fremont. Optimus Gen 3 is slated for unveiling later in 2026, with mass production potentially starting late in the year following a Q1 launch, pending supply chain readiness. Priced around $20,000 per unit, the general-purpose robot aims to handle unsafe, repetitive, or boring tasks, learning end-to-end neural networks through observation, voice commands, or video demonstrations. Early prototypes—a handful, some teleoperated—perform basic factory tasks but are not yet doing meaningful useful work, remaining in R&D.
This push aligns with Tesla's $20 billion 2026 capital expenditure plan, including advanced hardware like AI5 chips, which Musk deemed essential: without them, the robot would be 'completely useless.' CFO Vaibhav Taneja emphasized the need for greater computational resources. Musk also discussed potential Grok AI integration to coordinate robot teams for applications like factory construction or refinery operations.
Challenges persist in dexterity, battery life, supply chains, and bridging demonstration-to-deployment gaps, as noted in a McKinsey report. Tesla faces stiff competition from China, which dominates 80% of the global 15,000+ humanoid units shipped, though Musk praised their manufacturing while asserting Optimus superiority. Engineer Ashok Elluswamy highlighted the human-like design of Optimus 3. These steps position robotics as a key growth driver toward 'sustainable abundance,' with public sales eyed for 2027.
