Tesla CEO Elon Musk has announced a dramatic strategic shift, projecting that 80% of the company’s value will come from its Optimus humanoid robots rather than electric vehicles, positioning Tesla as a potential $25 trillion company by 2050. This pivot comes as Tesla’s core EV business faces mounting challenges, with global sales dropping 13% in the first half of 2025 and the company’s U.S. market share falling to levels not seen since 2017.
What you should know: Tesla plans aggressive production scaling for its Optimus robots, targeting 5,000 units this year and up to 1 million annually by decade’s end.
- The company built around 1,000 prototype units by mid-2025 but paused production for redesigns due to technical challenges including battery life issues and low payload capacity.
- Tesla is transitioning away from motion capture cameras to develop training methods that allow Optimus robots to learn tasks by watching humans perform them.
- The company plans to use its Full Self-Driving (FSD) chips to power AI decision-making and create vision-based navigation systems using what Musk calls “photon counting”—a system that relies solely on camera data rather than traditional sensors.
The big picture: Tesla’s robotics ambitions coincide with significant struggles in its traditional EV business across key markets.
- Global EV sales dropped 13% in the first half of 2025, with European sales plummeting 40% and Chinese sales declining 5% as local automakers gained market share.
- Tesla accounted for only 38% of total U.S. EV sales last month, marking its lowest market share since October 2017.
- The company faces multiple pressures including expiring EV tax credits, slowing consumer demand, and intensifying competition from companies like China’s BYD.
Market opportunity: GlobalData, a data and analytics company, projects the robotics industry will reach $218 billion by 2030 with a compound annual growth rate of 14%.
- Tesla is spending $10 billion on autonomous vehicle development by year-end while simultaneously investing heavily in humanoid robotics.
- Musk’s Master Plan Part 4 suggests this transition could transform Tesla from an automotive company into a robotics powerhouse.
What they’re saying: Investor and analyst sentiment remains divided on Tesla’s strategic direction.
- “The company’s stock is overvalued if people are buying it because Tesla sells EVs,” said Stephen Gengaro, a Stifel analyst who maintains a buy rating based on growth opportunities in Optimus and robotaxis.
- The CEO of Gerber Kawasaki, a wealth management firm, expressed skepticism, arguing Tesla “has abandoned its original mission” to “advance sustainable transportation and energy, not to create robotaxis and human robots.”
- Stephanie Valdez Streaty, director of industry insights at Cox Automotive, noted that “although Tesla positioned itself as a robotics company, a lack of new products caused shares to drop.”
Stock performance: Tesla shares have reflected the company’s turbulent transition with mixed market reactions.
- The stock dropped 2.76% year-to-date but surged roughly 8.21% in the past month to $368.81 following the release of Master Plan Part 4.
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