Tesla’s ‘most important’ project this year isn’t a car. It’s a robot
Elon Musk puts priority on what’s referred to internally as Optimus, a prototype of the humanoid robot is expected this year.
Tesla (TSLA) CEO Elon Musk, never short on ideas, says the company’s “most important product” this year is not a car but … wait for it … a robot.
Musk said during Tesla’s earnings call this week that the development of a humanoid robot, referred to internally as Optimus, is the company’s top priority, ahead of Cybertruck, Semi and Roadster. The lingering chip shortage, meanwhile, has driven Tesla to halt development of new car models and instead focus on scaling output of its existing lineup. This all might worry investors in his car company, with Tesla shares down almost 30% this year. But Musk’s big ideas have paid off in the past.
“This, I think, has the potential to be more significant than the vehicle business over time,” Musk said. Musk announced the company’s plans to build a “Tesla Bot” in August 2021 during Tesla’s “AI Day.”
What Tesla is working on
The bot, which will be in human form, will stand at 5’8” and weigh 125 pounds. It will be designed using Tesla’s autopilot system and other tools found in its cars. It’ll also have a screen on its face for useful information.
The Optimus robot will be used to eliminate “dangerous, repetitive, boring tasks,” according to Tesla. Its first use will be at Tesla “moving parts around the factory,” as the company tests whether the bot will be useful enough to justify wider production.
Musk said the bot could revolutionize the economy if it can perform tasks that only humans can currently carry out. “If you think about the economy, it is — the foundation of the economy is labor,” he said. “Capital equipment is distilled labor. So what happens if you don’t actually have a labor shortage? I’m not sure what an economy even means at that point. That’s what Optimus is about, so, very important.”
Will we actually see a Tesla robot?
Tesla says it expects to have a prototype finished this year.
But some Tesla skeptics point out that Musk has a history of announcing exciting projects that Tesla’s working on that don’t actually come to fruition. For instance, Musk said at Tesla’s 2019 “Autonomous Day” that the company would have 1 million autonomous robotaxis on the road by the end of 2020. Those robotaxis still don’t exist.
While not all his visions have panned out, he’s accelerated the rate at which electric vehicles have been adopted, is exploring Mars and building tunnels. He’s also creating implantable devices to help alleviate certain disabilities, like enabling people with paralysis to regain independence through the control of computers and mobile devices using brain activity.
With all he’s doing, who cares if he doesn’t always meet his timelines?
Tesla sold 936,172 vehicles in 2021, up from 499,550 in 2020 and 112,000 in 2019. The company has also seen its revenue grow 358% over the last five years.
Tesla is the world’s most valuable car company and the world’s leading electric vehicle (EV) maker.
But supply chain issues have been slowing the company’s ability to run its factories at full capacity. It’s not introducing new vehicle models again this year for the same reason. In addition, General Motors (GM) has recently set its sights on the EV leader. The automaker has committed $35 billion to outsell Tesla by 2025. GM is aiming to have 1 million EVs on the road by mid-decade, which is when it believes it will overtake Tesla as the top US-based seller of EVs.
Even without any new additions this year to Tesla’s lineup, it will likely continue to see growing vehicle sales. Musk said Wednesday that he forecast vehicle deliveries would comfortably grow by more than 50% year-over-year in 2022.
So even if the development of Optimus is Musk’s top priority this year, scaling up vehicle output, which is where the bulk of its revenues still come from, is likely very high on the list.
At the time of publication, Matt Miczulski owned shares of TSLA.
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