Tesla has commenced production of its Optimus humanoid robots at its Fremont, California factory, repurposing a space formerly used for electric vehicle manufacturing. The company describes these units as its first commercially viable production-quality robots while acknowledging ongoing iterations in hardware and manufacturing processes. Tesla CEO Elon Musk indicated that the production phase is still early and expects a gradual ramp-up, targeting a weekly output of 20,000 units by the end of 2027, despite challenges involving design refinements to ensure safety, longevity, and AI performance.

Despite this new manufacturing effort, Tesla’s third-quarter financial results reflected a significant profit decline of 43%, driven primarily by soaring expenses related to its investments in Optimus, artificial intelligence, and autonomous vehicle technology. Although Tesla maintained steady electric vehicle sales with revenues at $20 billion and delivered nearly 487,000 vehicles during the quarter, overall revenue remained unchanged year-over-year at roughly $28 billion. The solar and energy storage segment saw a 16% drop in revenue to $2.8 billion, attributed to tariff-related customer refunds, while Tesla’s service business grew by 33%, highlighting increased demand for its Full Self-Driving (FSD) subscription.

Tesla’s net income dropped to $787 million in Q3 2026 from $1.37 billion in the same period last year, with lower regulatory credit sales also impacting profitability. During Tesla’s earnings call, executives—including Musk, CFO Vaibhav Taneja, and AI VP Ashok Elluswamy—expressed optimism about the FSD product despite delays in delivering a fully unsupervised driving experience. Tesla currently offers a supervised FSD version requiring driver attention, with plans to enable unsupervised autonomous driving in selected customer vehicles by mid-2027 as part of a potential robotaxi fleet.

The cautious optimism surrounding Tesla’s AI and robotics ambitions stands in contrast to its short-term financial setbacks as the company balances ongoing innovation with cost control. While the Optimus robot production marks a significant step into humanoid robotics, Tesla’s leadership remains focused on refining the product’s safety and utility for broader application. Concurrently, Tesla’s ambition to advance autonomous driving technology continues to drive considerable investment, reflecting a broader strategic shift despite near-term profit pressure.