Elon Musk Envisions Optimus as Tesla's Biggest Product, but Production Delays and Costs Pose Challenges
On its first-quarter earnings call in April 2026, Tesla CEO Elon Musk reiterated his belief that the company’s humanoid robot, Optimus, could become 'the biggest product ever.' He has projected up to $10 trillion in long-term sales for the project. However, production timelines have been pushed back multiple times; initial goals of producing several thousand units by 2025 were not met and are now expected later this year. Optimus is central to Tesla’s strategic shift toward becoming a 'physical AI company.' To support its development, Model S and X production lines in Fremont, California have been repurposed. A second site at Gigafactory Texas aims for eventual annual capacity of 10 million units. Despite this ambition, the first robots from Fremont are not customer-facing but will be used internally as part of a research program called 'Optimus Academy.' Tesla's capital expenditures surged to $5.79 billion in Q2 2026, pushing free cash flow into negative territory at -$1.09 billion. The company expects over $25 billion in capex for the full year and anticipates continued negative FCF.
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