Technology and Scienceupdated 1h ago2 min read
Tesla Begins Optimus Humanoid Robot Production in Fremont, California as Profits Drop 43%
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Optimus production has begun at Fremont, producing first production-quality bots. Q3 profits dropped 43% due to higher costs and AI investments.
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Fremont starts Optimus
Tesla began production of its Optimus humanoid robot at its Fremont, California factory in a manufacturing space once dedicated to making electric vehicles, the company said in its third-quarter letter to shareholders. Tesla wrote, “The robots coming off this line are the first high-quality production robots we have built,” and it added, “we have shown that the current manufacturing process for Optimus is suitable for a commercial product.” Elon Musk said on a conference call that Tesla considers the output “early production,” and he described the ramp as slow and “somewhat bumpy because it is such a radically new product.”
Tesla reported a 43% drop in profits, with net income falling to $787 million and revenue totaling $28.04 billion in the third quarter. Tesla also reported that it delivered 486,532 vehicles in the third quarter, about 6,000 more than the previous quarter, even as it pressed spending on Optimus, AI, and autonomous driving.
V3 and AI5
Elon Musk said Tesla has started early production of Optimus at its Fremont factory, and he described the growth trajectory as an S-curve, meaning the initial ramp is intentionally shallow before it accelerates. Musk said Tesla may be ready to release an Optimus V3 video in roughly one to two months, and he specified that the video would show Optimus performing tasks that are not pre-programmed. Musk said AI5 is Tesla's next-generation AI inference chip, and he said the company wants to begin integrating it into Optimus in April of next year.
Musk said the current Optimus V3 hardware already represents a substantial step up, and he pointed to its hands featuring 22 degrees of freedom. Musk cautioned that reaching 20,000 units per week will take “at least a year, maybe a little longer,” even as he set a near-term target of over 1,000 units per week by end of 2026.
Scale, customers, and stakes
BASENOR said Tesla is building a second Optimus production line at Gigafactory Texas with planned annual capacity of 10 million robots, while Fremont remains the sole active production site for now. Musk said the first customers for Optimus would be industrial applications, specifically dangerous, repetitive tasks and jobs that need to run 24 hours a day, seven days a week. Musk said Tesla wants to begin integrating AI5 into Optimus in April of next year, framing the chip as onboard compute that reduces reliance on cloud inference.
Tesla’s third-quarter results showed services growth, with services business growing 33% to $4.6 billion, and the company reported $787 million in net income. TechCrunch reported that Musk claimed Tesla will be able to make 20,000 of them per week by the end of 2027, even as he said there is still “quite a lot of work to do with regard to the AI and the robot for it to be truly useful for open-ended tasks.”