Tesla Begins Optimus Robot Production in California Amid 43% Profit Decline

Optimus Production Line Opens in Fremont

Tesla has launched manufacturing of its Optimus humanoid robot at its Fremont, California plant, repurposing a space previously used for electric vehicles. In its third‑quarter shareholder letter the company said the first robots off the line are production‑quality units and that the current manufacturing process is suitable for a commercial product.

The bots coming off this line are the first production‑quality bots that we have manufactured. While we will continue to iterate on the hardware and manufacturing process, we have proven that the current manufacturing process for Optimus is suitable for a commercial product.

CEO Elon Musk described the effort as “early production,” warning that the ramp‑up will be slow and “somewhat bumpy” because the robot is a radically new product. He added that Tesla still needs to refine the design for safety, durability and usefulness in open‑ended tasks, and that the artificial‑intelligence component requires further work. Musk also set a long‑term target of building 20,000 units per week by the end of 2027.

Third‑Quarter Earnings Show Flat Revenue and a Sharp Profit Drop

Tesla reported third‑quarter revenue of $28.04 billion, essentially unchanged from the $28.09 billion recorded in the same quarter of 2025 and $200 million lower than the $28.23 billion posted in the second quarter. Electric‑vehicle sales, which generated $20 billion, were flat year‑over‑year. The company delivered 486,532 vehicles in the quarter, about 6,000 more than the previous quarter but fewer than in the same period last year. Net income fell to $787 million, a 43 percent decline from the $1.37 billion earned in the third quarter of 2025. Lower regulatory‑credit sales added pressure to profitability, and the surge in spending on AI and the Optimus program offset the modest revenue growth.

Segment Results Highlight Mixed Performance

Revenue from the solar and energy‑storage business dropped 16 percent year‑over‑year to $2.8 billion, a decline the company attributed to tariff‑related customer refunds. In contrast, the services segment, which includes Full Self‑Driving subscriptions, grew 33 percent to $4.6 billion and delivered a record $734 million in gross profit for the quarter. Despite the services growth, the overall financial picture remained weak because the heavy investment in artificial‑intelligence projects and the Optimus robot consumed a large portion of the company’s earnings.

Autonomous Driving Timeline Remains Uncertain

During the earnings call, executives including Musk, CFO Vaibhav Taneja and AI software vice president Ashok Elluswamy expressed confidence in the Full Self‑Driving product, even as the rollout of the unsupervised version was delayed again. Tesla owners can currently subscribe to a supervised version that requires driver attention. Elluswamy suggested that privately owned Tesla vehicles equipped with FSD (Supervised) could begin receiving an update for unsupervised driving around the second quarter of next year, positioning them for a robotaxi fleet. Musk had previously indicated the unsupervised release would “probably” arrive in the fourth quarter of this year. The unsupervised capability would represent Level 4 autonomous driving, similar to that used in robotaxis.

Looking Ahead

The launch of Optimus production marks a pivotal step in Tesla’s diversification beyond cars, but the immediate financial results underscore the cost of that ambition. With profit margins compressed and revenue stagnant, the company’s bet on robotics and AI will need to deliver both scale and profitability to justify the current expenditure.

This story has been updated with information from Tesla’s quarterly conference call.