Tesla Starts Optimus Robot Production as Profit Falls 43%
Tesla has commenced production of its Optimus humanoid robot in Fremont, California, while navigating a 43% drop in net income driven by heavy investments in artificial intelligence and autonomous driving.
Radwan AbdulhadiEditor and technology writer
Optimus Humanoid Robot Production Begins in California
Tesla has officially started production of its Optimus humanoid robot at its factory in Fremont, California, utilizing a manufacturing space that was once dedicated to building electric vehicles. The announcement was detailed by the company in its third-quarter letter to shareholders, marking a major milestone for the automaker's robotics ambitions.
The initial units coming off the newly established assembly line represent the first production-quality bots manufactured by the company. According to the detailed corporate update, Tesla has proven that its current manufacturing process for the Optimus platform is suitable for a commercial product, though the hardware and manufacturing processes will continue to iterate.
Production Outlook and Technological Hurdles
During a conference call with investors and analysts, Tesla CEO Elon Musk characterized the current manufacturing phase as early production. He cautioned that the production ramp will be slow and somewhat bumpy due to the radically new nature of the product.
Despite the anticipated manufacturing challenges, Musk maintained an ambitious long-term outlook, claiming that the company aims to reach a production rate of 20,000 units per week by the end of 2027. However, he acknowledged that significant design and engineering work remains ahead.
“There’s still some things we need to tweak about the design, because you need to deliver a robot that is that is safe and reliable and has long duration,” Musk explained during the call. He also emphasized that substantial work remains regarding the underlying artificial intelligence to ensure the robot is truly useful for open-ended tasks.
Financial Impact and 43% Profit Drop
The forward-looking investments in robotics, artificial intelligence, and autonomous driving weighed heavily on the company's financial performance during the quarter. While management pressed the accelerator on these emerging technology initiatives, total expenses skyrocketed, leading to a sharp 43% decline in net income.
Tesla reported $787 million in net income for the quarter, a significant drop compared to the $1.37 billion earned during the same period in the previous year. Additional downward pressure on overall profitability came from lower regulatory credit sales.
The company stayed profitable largely due to a strong contribution from its services and other segment, which delivered a record $787 million in gross profit for the quarter. More details on the overarching strategy were covered in initial reporting published on TechCrunch.
Revenue and Electric Vehicle Sales Overview
Overall corporate revenue remained flat during the period, totaling $28.04 billion, which sits slightly below the $28.09 billion generated in the third quarter of 2025. Core revenue was primarily driven by electric vehicle sales, which remained flat year-over-year at $20 billion.
During the quarter, the automotive manufacturer delivered a substantial volume of vehicles, sustaining operational momentum despite ongoing challenges in the United States market. The company delivered 486,532 vehicles in the third quarter, representing an increase from the previous quarter but a slight decline compared to the same period last year.
Energy Storage and Services Business Segments
Performance varied across secondary business segments during the quarter. The solar and energy storage business experienced a 16% year-over-year drop, bringing in $2.8 billion. Management attributed this decline primarily to tariff-related customer refunds.
Conversely, the services business demonstrated robust growth. Driven in part by customer subscriptions to the Full Self-Driving advanced driver-assistance software, the services division expanded by 33% year-over-year to generate $4.6 billion in revenue.
Sources
- TechCrunchTesla stars Optimus robot production in California as profit falls 43%
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