Tesla plans to repurpose its Fremont, California factory to focus on the production of its Optimus humanoid robot, according to statements made during the company’s fourth-quarter earnings call. The shift comes as Tesla aims to commence initial production of Optimus “probably” by the end of the year, a move that could represent a pivotal change for the electric vehicle manufacturer.
The decision to retool the Fremont facility signals a significant commitment to robotics, a vision long championed by Tesla CEO Elon Musk. Musk has described Optimus as a potential solution to labor shortages, envisioning the robots being deployed in factories, retail settings, and even households to increase efficiency. This move marks a departure from Tesla’s core business of electric vehicle manufacturing, potentially mirroring the transformative impact the iPhone had on Apple.
Prior to the introduction of the iPhone in 2007, Apple’s revenue was largely driven by computer sales. The iPhone created a new, lucrative market for mobile devices and services, fundamentally altering Apple’s business model. Tesla appears to be pursuing a similar strategy with Optimus, aiming to not only sell the robots themselves but also generate recurring revenue through subscription-based access to its autonomous system software, allowing users to upgrade the robot’s capabilities over time.
The move comes as Tesla’s electric vehicle sales growth has begun to decelerate. Investors are increasingly focused on the potential of Tesla’s AI initiatives, including Optimus, to drive future growth. However, some analysts caution that the current stock price reflects a significant amount of optimism regarding Tesla’s AI prospects, potentially exceeding the company’s current operational performance.
Recently, Yilun Chen, a former Apple research scientist, joined Tesla’s Optimus AI team. Chen, who held roles spanning engineering, research, and product incubation during his nearly four years at Apple, cited being “totally blown away by the scale and sophistication of the Optimus lab and deep dedication of people” as a key factor in his decision to join Tesla. His expertise includes robotics foundation models, dexterous manipulation, and humanoid whole body control, areas critical to the development of advanced humanoid robots.
Tesla is already producing Optimus units at its Fremont pilot line and has begun construction on a large-scale production facility at Gigafactory Texas, with plans to scale to 1 million units annually by late 2026. The Optimus V3 is expected to debut in early 2026. By contrast, Apple’s robotics efforts appear to be several years behind, having shuttered its autonomous car project, Project Titan, in February 2024 after a decade and over $1 billion in annual spending.
Tesla’s approach to AI and robotics, as outlined on its website, centers on developing and deploying autonomy at scale, utilizing advanced AI for vision and planning, supported by efficient hardware. The company believes this approach is essential for achieving full self-driving capabilities and advanced bi-pedal robotics.
