Getting Off The Fence: Tesla Bot Looks Like Tesla’s Next Giant Success

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I wrote the other day about Tesla Optimus and posed the question of whether it was a “savior” for the company* or overhyped. (*Or, really, a savior for the company’s stock price/valuation. The company is fine and will remain fine, but its extremely high stock price relies on something big in order to seemingly make sense.) Savior is not really the best word to use, but the point is that I think there’s a mismatch growing between Tesla’s CAGR targets and the reality of its vehicle demand. One way around that problem might be a lower cost model that boosts Tesla sales massively, but there are risks with that approach (such as significant cannibalization of its higher-cost, higher-margin models). One way to get back to 50% CAGR is with robotaxis, but I don’t see those being viable anytime soon. The Cybertruck is one dream solution for many who think it could be Tesla’s most popular model. I don’t think it will be. And then there’s the Tesla bot, Optimus. This is the one innovation I’ve thought has the potential to maybe deliver the business growth Tesla is looking for. On the other hand, it hasn’t been especially clear to me if Tesla’s bot is anything special. Well, it hadn’t been clear to me — but I think I’m convinced.

In response to my article the other day, one reader (codenamed “No Piston”) dropped the following video into a comment:

I don’t have the expertise to evaluate Optimus or to evaluate this video about Optimus with serious conviction, but some things I think we’ve always done pretty well here at CleanTechnica are: get down to the bottom of important technical matters, understand where technologies and markets are headed, and communicate those technical matters in simple language. The video above provides excellent communication of highly technical matters, but it’s still quite technical (and long). From watching it, though, my core takeaway is that Optimus will indeed be disruptive.

The whole video is worth a watch, but here are some key points I took away from it:

1. Robots from Boston Dynamics have already been left in the dust as they rely on antiquated coding and software structures. These robots can’t learn in the same way computers/robots relying on modern neural nets can learn.
2. Robots from Tesla and startups like Figure AI have quickly surpassed those outdated robots and are already humanoids much more similar to humans in movement, fluidity, the breadth of tasks they can conduct — and overall usability. And they’re just getting started!
3. Large language models are making it much easier to train and improve these advanced robots.
4. Improvements in cost and capability of electric motors, batteries, and other hardware are key to making humanoid robots more viable beyond super niche applications. A usable and practical humanoid wasn’t close to viability 10 or even 5 years ago. Ongoing experience curves in these fields help more and more to make such robots viable.
5. The first commercially useful applications of such robots will be in factories.
6. With Tesla’s manufacturing needs and expertise, ability to quickly train large numbers of robots, and experience in integrating advanced hardware and software, no other company can genuinely outcompete Tesla in terms of scaling up testing and eventual utilization of such robots.
7. Tesla is probably already training robots on some production lines and could well start using them for commercial purposes (to save money) in about a year.
8. Tesla can then move to selling Optimus bots to other manufacturing businesses at a scale no other company will be able to touch.

In short, Tesla has everything already in place or at its fingertips to lead this new market, and this new market could start really sprouting in about a year. I’m sold based on the thorough arguments made in the video. I highly encourage giving it a listen/watch. I’m still open minded, especially since this is outside my area of expertise, but the video is very convincing.

How much will Optimus actually cut labor costs and save Tesla money? I don’t have an estimate for that, but I think it will be enough that it will be disruptive in the manufacturing sector, giving Tesla a manufacturing advantage and eventually a huge lead and big portion of the pie in a brand new market.