During Tesla's third-quarter earnings call on October 2025, CEO Elon Musk highlighted the company's Optimus humanoid robot as potentially its biggest product ever, stating it could account for 80% of Tesla's value. Despite mixed financial results with record vehicle sales but declining profitability, Musk described Optimus as an 'infinite money glitch' at scale. He also expressed a need for strong influence over what he called a 'robot army' to proceed with development.
Tesla reported its Q3 2025 earnings last week, showing total revenue of $28.09 billion, up 11.6% year-over-year, beating estimates by $1.39 billion. Automotive revenues reached $21.2 billion, a 6% increase, driven by a surge in deliveries ahead of expiring EV tax credits. The energy segment performed strongly with $3.4 billion in revenue, up 44%, including record storage deployments and the introduction of the Megablock product. However, profitability weakened: GAAP gross margin fell to 18%, down 185 basis points, operating profit dropped 40% to $1.6 billion, and adjusted EPS was $0.50, down 31% and missing expectations.
CFO Vaibhav Taneja noted $400 million in tariff-related costs impacted the quarter. Musk attributed some challenges to shifting EV policies and geopolitical uncertainty, forecasting difficulties in volume predictions.
Amid these results, Musk focused heavily on Optimus, mentioning it 36 times. He called it 'the biggest product of all time' and an 'infinite money glitch' once scaled, potentially comprising 80% of Tesla's value. A prototype for volume production is expected by March, with first-generation production lines being installed. Musk envisions producing up to 1 million units annually by decade's end, enabling applications like skilled surgery to eliminate poverty alongside self-driving tech.
Challenges include complex engineering for hands and forearms, and building a supply chain from scratch, requiring vertical integration. Musk stressed needing 'strong influence' over the 'robot army,' stating, 'If we build this robot army, do I have at least a strong influence over this robot army? Not control, but a strong influence… I don’t feel comfortable building that robot army unless I have a strong influence.' He tied this to a proposed $1 trillion compensation package for leadership in AI and robotics.
Analysts give Tesla a 'Hold' rating, with shares up 9.7% year-to-date but trading at a premium to the $376.37 mean target. Market projections see humanoid robotics reaching $5 trillion by 2050, per Morgan Stanley.
