After a rough first half of 2025, Elon Musk just shared new details about Tesla’s much anticipated Generation 3 Optimus humanoid robot.
Plans for commercializing the robots have changed significantly since Tesla’s last update. While Musk says he’s confident Optimus will be one of the biggest products ever produced, observers question whether Tesla can still lead the market amid intensifying competition.
“(We’re going to try to scale Optimus production as fast as humanly possible … Try to get to a million units a year as quickly as possible,” Musk said during Tesla’s Q2 2025 earnings call.
Tesla supercharged the emerging race toward synthetic humans when Elon Musk unveiled the Tesla Bot concept during the EV maker’s August 2021 AI Day event. Musk’s statements about projected production volumes have evolved significantly in the years since.
Tesla channeled Honda’s energy when it developed its ASIMO humanoid robot that was perceived as a symbol of the future in the 2000s. While the Japanese automaker approached ASIMO as an expensive R&D program and powerful PR tool, Musk has taken a bold stance, positioning Optimus as Tesla’s next core product line.
Before there was even a physical prototype, and a dancing cosplayer appeared on stage in its absence, Musk claimed production could begin as early as the following year. The announcement was met with skepticism and mockery, but investors have since warmed up to humanoids, with many betting on it rapidly turning into a $1 trillion industry.
When showcasing two early prototypes in 2022, Musk softened his projection, saying production is possible within a few years. At the time, Musk emphasized technical progress over production expectations.
By the time Tesla unveiled the Generation 2 Tesla Bot in December 2023, the Chinese government had already made it a national policy to lead in humanoid robotics, with ministries backing the mass production of general-purpose fake humans by 2025. This sparked a surge of interest in investment and competition, turning China into the fastest-growing hotspot for humanoid development worldwide. Credible competitors also emerged in the West, including the Silicon Valley unicorns Figure AI and 1X Technologies.
Musk’s statements became increasingly bold in 2024 as the humanoid robotics race really started heating up. He said Optimus robots could be ready to sell as soon as the end of 2025 and able to perform factory tasks by year’s end. He predicted that production would scale quickly to become Tesla’s most profitable product by far. By 2040, he said, there’d be more humanoid robots than people and Optimus would power a $25 trillion valuation.
Entering 2025, Musk said Tesla aimed to manufacture at least 10,000 humanoids by the end the year. Amid setbacks and controversy, he lowered the projection to 5,000 bots during an all hands meeting in March.
As Musk’s work with the Trump administration’s Department of Government Efficiency (DOGE) altered the public’s perception of the brand, Musk confirmed that China’s rare-earth export restrictions threatened Optimus production timelines. While talking up the robot’s long-term revenue generating potential, he made a point to clarify that Optimus is still very much a prototype.
In Musk’s post-Trump era, the world’s richest man remains bold but increasingly measured and cautious in his Optimus projections.
During Tesla’s latest earnings call, Musk said his company is navigating a weird transition and forecasted rough quarters ahead. He said Tesla is currently at Optimus 2.5 and has finalized the third iteration’s design, which is engineered for high-rate manufacturing.
“We’re evolving to Optimus design and really getting Optimus to the point where it is a phenomenal design,” he said.
He called the Generation 3 Optimus exquisitely designed with no significant flaws. According to Musk, every part of the Tesla bot is designed from scratch.
Tesla entered the second quarter call with reasons to be optimistic about Optimus. The robots have begun entering the real world, doing light work at Tesla’s new retro futuristic diner in Hollywood.
The Tesla Diner, first conceptualized in 2018, combines a 1950s inspired dining experience with a modern electric vehicle charging infrastructure. Optimus humanoids appeared in viral footage from the diner’s launch, serving popcorn and interacting with guests. On his X social media platform, Musk said the robots would deliver meals to cars by 2026.
Musk said Tesla is applying the same real-world AI training used in its self-driving cars to power the Optimus humanoid’s autonomous capabilities. Tesla claims it has the highest intelligence density in artificial intelligence, with more efficiency inference per gigabyte than anyone, including Google.
Musk said Optimus robots are already operating in Tesla factories and walking around the manufacturer’s Palo Alto office around-the-clock.
Reports of design flaws and challenges delaying the project emerged leading up to the latest investors call. According to reports, issues included overheating joint motors, low payload capacity in its hands, short gearbox and transmission life spans, insufficient battery life, and general efficiency lagging far behind humans. The reports said Tesla paused production after manufacturing around a thousand units amid leadership changes.
“It’s a very hard problem to solve,” he said of designing a humanoid robot. “You have to design every part of it from physics-first principles. You’re going to design every motor, gearbox, power electronics, control electronics, sensors, the mechanical elements.”
Musk said to expect Optimus 3 prototypes by the end of 2025. Full-scale production is planned for early 2026. Tesla is targeting a million units per year within the next five years. Musk said he still thinks Optimus will be Tesla’s biggest product ever. The robot is seen as critical to cutting labor costs, especially in the robotaxi ecosystem.
“We think we can get there in less than five years,” he said. “A million units a year in five years, that seems like an achievable target.”
Musk has said Tesla’s humanoids will drop in price as production scales, aiming for a price point between 20 and 30 thousand dollars. In the meantime, competition will likely remain unrelenting for the foreseeable future.
Among them is Palo Alto-based K-Scale Labs, which was launched by former Tesla engineer Benjamin Bolte. The founder, who contributed to the Tesla Bot’s first vision system, speculated in a recent interview that poor technical decisions hampered its development.
K-Scale has risen fast amid the humanoid robotics craze, moving from garage prototypes to a limited production run of its open-source $9K humanoids scheduled for later this year.