Tesla Starts Optimus Robot Production in California as Profit Falls 43%

News source: Google /   https://techcrunch.com

Tesla has started production of its Optimus humanoid robot at its Fremont, California factory, the company announced Wednesday in its third-quarter shareholder letter, marking a significant step in its transformation from an electric vehicle maker to a robotics and AI company.

"The bots coming off this line are the first production-quality bots that we have manufactured," Tesla wrote in the letter. "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."

The production line occupies space once dedicated to the Model S and Model X, which Tesla discontinued earlier this year to make room for robot manufacturing. The Fremont line is designed for eventual capacity of one million robots per year, with a second line under construction in Austin planned for 10 million annually.

A Bumpy Ramp

CEO Elon Musk cautioned that this is "early production" and that scaling will be "somewhat bumpy because it is such a radically new product." He compared the ramp to an S-curve with a shallow initial slope, noting that "there are like 10,000 things that have to go right for production of the robot, and it will move as fast as the slowest, least lucky of the 10,000."  Musk said Tesla aims to reach 20,000 Optimus units per week by the end of 2027, but acknowledged it will take "at least a year maybe a little longer to get to that annualized rate."  He also admitted that "there's still quite a lot of work to do with regard to the AI in the robot" for it to be useful for open-ended tasks.

The Profit Picture

The Optimus milestone came alongside sobering financial results. Tesla reported third-quarter net income of $787 million, down 43% from $1.37 billion a year earlier. Revenue was essentially flat at $28.05 billion. Operating income plunged 56% to $718 million, with the operating margin narrowing to 2.6% from 5.8%. Tesla attributed the decline to higher operating expenses related to AI and research and development, increased stock-based compensation, and lower regulatory credit revenue. Capital expenditures more than doubled to $4.73 billion from $2.25 billion, as Tesla invested heavily in manufacturing capacity and AI projects.

What's Next?

The first Optimus units are being deployed internally at Tesla's own facilities as part of an "Optimus Academy" program to collect training data before they are assigned productive tasks. Tesla has not announced a price or a date for external sales.

Here is the question The Silicon Review raises. Tesla has finally started building production-quality Optimus robots, but the company's profit just fell 43% as it burns cash on AI and robotics. When a carmaker's core business is shrinking while its robot dream is still years from commercial reality, how long can the bet on Optimus sustain investor patience?

FAQ:

Q: Where is Tesla producing the Optimus robot?
A: Tesla is producing Optimus at its Fremont, California factory, on a line converted from former Model S and Model X production.

Q: How much did Tesla's profit fall in Q3 2026?
A: Tesla's net income fell 43% to $787 million from $1.37 billion a year earlier.

Q: When will Tesla reach high-volume Optimus production?
A: CEO Elon Musk said it will take at least a year to reach 20,000 units per week, targeting the end of 2027.

Q: Can consumers buy an Optimus robot yet?
A: No. The first units are being used internally at Tesla facilities. Tesla has not announced a price or sale date.

Q: Why did Tesla's profit fall despite starting Optimus production?
A: Tesla cited higher AI and R&D expenses, increased stock-based compensation, and lower regulatory credit revenue.