Tesla stock plunges as Musk warns Optimus is hard to scale

Tesla shares fell 14% on Thursday after the automaker reported negative free cash flow of $1.1 billion, even as revenue rose 26% year over year. But CEO Elon Musk’s warnings about Optimus, Tesla’s humanoid robot, appeared to deepen concerns about the company’s technology ambitions.

Musk warns Optimus will be difficult to build

Musk used Tesla’s earnings call Wednesday evening to emphasize the engineering and manufacturing challenges ahead. He pointed to wear and tear, dexterity in the robot’s hands, reliability, and the difficulty of producing a machine whose components are largely new to Tesla.

“Optimus, as you’ve heard me say before, I think Optimus will be the biggest product ever. But it is a very complex problem to solve.”

He also described production as an unprecedented challenge for the company:

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“I really want to emphasize here that the production scaling challenge is very substantial. This is going to be the hardest product to scale manufacturing that we’ve ever made at Tesla because everything on the robot is new. And the difficulty of scaling the production ramp is proportionate to the newness of the parts.”

Musk contrasted Optimus with Tesla’s cars, for which the company already has established supplier and manufacturing processes.

Tesla’s robot trails rivals

Optimus appears to be behind robotics companies such as Figure and Boston Dynamics, whose published videos show robots performing tasks that remain difficult for Tesla’s machine. Musk argued that many impressive online demonstrations by competitors rely on preprogramming or remote control.

“So you’ve probably seen lots of impressive demonstrations of robots on the Internet. But those demonstrations you’re seeing are preprogrammed or remote controlled. So there is no humanoid robot that is actually able to do generalized tasks. Optimus will be the first one that is capable of doing that.”

Tesla has faced similar criticism. The company used teleoperated robots to serve beer at a 2024 event, and it has been accused of using sped-up video to make Optimus appear more agile. Figure has also faced allegations of teleoperation, which its CEO has denied.

Musk left open the possibility of a future Tesla–SpaceX merger, saying he could not comment on it yet. His wealth, tied closely to both companies' stock prices, has fallen to $718 billion, according to Forbes, from a peak of $1.4 trillion. Tesla shares are trading at $115, down from $201 shortly after the company’s IPO.

Musk has repeatedly framed Tesla as a technology company rather than merely a carmaker, predicting that robots will replace jobs and eventually perform tasks such as childcare. Optimus is central to that vision—but the earnings call made clear that turning the robot into a reliable, scalable product remains a substantial challenge.