CNN
By Hadas Gold, CNN
(CNN) — Tesla dominated the electric vehicle industry by the mid-2010s with sleek, fast cars that helped combat the public perception that EVs were severely limited by short ranges.
Now the company – and its controversial CEO, Elon Musk – face stiffer competition and political headwinds. Its EV sales fell by a record 9% in 2025, amid increasing rivalry from China and the expiration of the US EV sales tax credit.
But Musk has been steering the company toward an audacious bet. He believes Tesla’s future won’t ride on cars but on humanoid robots.
On Tesla’s earnings call on Wednesday, Musk laid out a literal replacement of Tesla cars by robots – announcing Tesla would discontinue the Model S and Model X in favor of making more of its Optimus robots.
“We’re gonna take the Model S and X production space in our Fremont factory and convert that into an Optimus factory … with the long-term goal of having 1 million units a year of Optimus robots in the current SX space in Fremont,” he said.
It’s the quintessential, science-fiction dream of the future: Musk says Tesla’s Optimus robots will do everything from cleaning your house to performing surgery.
He’s called Optimus the key to eliminating world poverty, making human work optional and reaching Mars. And he claims they’ll be on sale by the end of 2027.
“Every human on earth is going to have their own personal R2-D2, C3PO,” Musk said in November, referring to the personal robots from Star Wars. “But actually, Optimus will be better than that.”
But critics say these are fever-dream distractions from Tesla’s core automotive business. And plenty of companies, like Boston Dynamics and Figure, are already deep into the humanoid robot business.
Musk’s own success and pay are directly at stake. Tesla must deliver one million Optimus robots within 10 years for Musk to fully realize an almost $1 trillion Tesla pay plan approved by shareholders late last year.
“Elon is a big thinker, and he wants to be pushing the edge of people’s imagination,” a former Tesla senior engineer told CNN in an interview.
But the EV and robot markets are very different, the engineer said. “With electric vehicles, Tesla was really the only one working on this hard problem. There’s a lot of companies now and tons of competition.”
‘Infinite money glitch’
Tesla first unveiled its humanoid robot project at a 2021 event, where a silvery figure danced to thumping techno music on a stage. It was an actor in a robot suit, complete with a face that looked like a screen. “Obviously, that’s not real,” Musk said as the costumed figure left the stage.
Just months later, in January 2022, Musk said he thought Optimus could be “more significant than the vehicle business” for Tesla over time.