Tesla has started producing its Optimus humanoid robot at its Fremont, California, factory, using space previously dedicated to electric vehicles. The announcement came as the company reported a 43% drop in third-quarter profit.
In its letter to shareholders, Tesla called the robots coming off the line its first “production-quality bots.” The company said the current manufacturing process is suitable for a commercial product, though it will keep refining the hardware and the process.
CEO Elon Musk described the work as “early production” on the company’s earnings call. He said the increase in output would be slow and “somewhat bumpy” because the product is new. Musk claimed Tesla could make 20,000 Optimus robots a week by the end of 2027. He also said more work is needed on safety, reliability, durability and the AI required for open-ended tasks.
Spending weighed on profit
Tesla reported $787 million in net income, down from $1.37 billion in the same quarter of 2025. Spending on AI projects and Optimus weighed on profit, as did lower sales of regulatory credits.
Total revenue was $28.04 billion, compared with $28.09 billion a year earlier and $28.23 billion in the previous quarter. Electric vehicle sales revenue was flat from a year earlier at $20 billion. Tesla delivered 486,532 vehicles, about 6,000 more than in the previous quarter but fewer than a year earlier.
Revenue from solar and energy storage fell 16% from a year earlier to $2.8 billion. Tesla attributed the decline to tariff-related customer refunds. Services revenue rose 33% to $4.6 billion, with a record $734 million in gross profit. That business includes subscriptions to Full Self-Driving, Tesla’s advanced driver-assistance software.
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Current subscribers use a supervised version of Full Self-Driving that requires drivers to pay attention and be ready to take over. Tesla executives discussed an unsupervised version that would provide Level 4 autonomous driving capabilities similar to those used in robotaxis.
Ashok Elluswamy, Tesla’s vice president of AI software, said the company suspects it could enable some privately owned Tesla vehicles to join its robotaxi fleet “somewhere around Q2 next year.” That would require a software update to allow unsupervised driving.
