Tesla reported an 11 percent decline in automotive revenue in Q4 2025 and committed $20 billion in capital expenditures for 2026 focused on manufacturing and compute infrastructure. The company plans to retool its Fremont, California, factory, discontinuing Model S and X production as of Q2 2026, to build a line capable of producing one million Optimus humanoid robots per year. Optimus is described as a bi-pedal, general-purpose robot for unsafe, repetitive, or boring tasks, with a manufacturing target cost of $20,000 per unit. Elon Musk expressed confidence in reaching one million units annually and claimed Optimus will learn by observing humans. Musk has a record of missed timelines, including delayed crewed SpaceX launches and slower-than-promised deployment of driverless Tesla robotaxis.
"The cash conflagration includes a plan to shift its Fremont, California, manufacturing facility from making Tesla S and X model vehicles, discontinued as of Q2 2026, into a production line capable of turning out one million Optimus robots annually. Optimus, as described by Tesla, is "A general purpose, bi-pedal, humanoid robot capable of performing tasks that are unsafe, repetitive or boring." Tesla says it is aiming at a manufacturing cost of $20,000 per unit."
""I'm confident that we'll get to a million units a year in Fremont of Optimus 3," said Musk on Tesla's Q4 2025 earnings call. "This Optimus really will be a general-purpose robot that can learn by observing human behavior." Musk has a history of fanciful forward-looking statements. For example, in a 2011 interview with The Wall Street Journal, he said that Space X would put an astronaut into space within three years. That didn't happen until 2020."
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