A mockup of Tesla Inc.’s planned humanoid robot Optimus on display during the Seoul Mobility Show in Goyang, South Korea, on Thursday, March 30, 2023. The motor show will continue through April 9. Photographer: SeongJoon Cho/Bloomberg via Getty Images
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Tesla first revealed its plans to work on humanoid robots in 2021 at an AI Day event, trotting out a dancer in a unitard that looked like a sleek, androgynous robot.
In January, Tesla showed off Optimus robots folding laundry in a demo video that was immediately criticized by robotics engineers for being deceptive. The robots were not autonomous, but were rather being operated with humans at the controls.
At the shareholder event on Thursday, Musk didn’t divulge exactly what Optimus can do today. He suggested the robots some day will perform like R2-D2 and C-3PO in Star Wars. They could cook or clean for you, do factory work, or even teach your children, Musk suggested.
As for shareholder value, Musk said Optimus could be the catalyst for lifting Tesla’s market cap to $25 trillion someday.
Speaking to a crowd consisting mostly of fawning fanboys in an auditorium at the Gigafactory, Musk promised Tesla would move into “limited production” of Optimus in 2025 and test out humanoid robots in its own factories next year.
The company, he predicted, will have “over 1,000, or a few thousand, Optimus robots working at Tesla” in 2025.
This is all far-out stuff even for Musk, who is notorious for making ambitious promises to investors and customers that don’t pan out — from developing software that can turn an existing Tesla into a self-driving vehicle with an upload, to EV battery swapping stations.
Getting to a $25 trillion market cap would mean that Tesla would be worth about eight times Apple’s value today. The iPhone maker is currently the world’s biggest company by market cap, just ahead of Microsoft.
At Thursday’s close, Tesla was valued at about $580 billion, making it the 10th most valuable company in the S&P 500.
Musk didn’t provide a timeframe for reaching $25 trillion. He did say that autonomous vehicles could get the company to a market cap of $5 trillion to $7 trillion.
Musk said he agreed with numbers from long-time Tesla bull Cathie Wood, the CEO of ARK Invest. This week, ARK put a $2,600 price target on Tesla’s stock by 2029, betting on a commercial robotaxi business that the company has yet to enter.
Wood’s price target equals a market cap for Tesla of over $8 trillion.
Musk’s comments at the annual meeting followed the shareholder vote to reinstate the CEO’s $56 billion pay plan, five months after a Delaware court ordered the company to rescind the package. The crowd cheered when the proposal was read aloud, and when preliminary results were announced.
Taking the stage following the readout of the shareholder votes, Musk said, “I just want to start off by saying hot d—! I love you guys.”
Tesla shares have dropped 27% this year as the company reckons with a sales decline that’s tied in part to an aging lineup of electric vehicles and increased competition in China. The company has also implemented steep layoffs. Musk has encouraged investors to look past the current state of the business and more toward a future of autonomous driving, robots and artificial intelligence.
Among his boldest claims on Thursday was Musk’s declaration that Tesla had advanced so far in developing silicon that it’s surpassed Nvidia when it comes to inference, or the process that trained machine learning models use to draw conclusions from new data.
Nvidia shares have soared almost nine-fold since the end of 2022, driven by demand for its AI chips. The company is now worth about $3.2 trillion.
One concern swirling around Musk is his focus on Tesla given all of his other commitments. He owns and runs social media company X, is CEO of SpaceX, and founded The Boring Co. and Neuralink. He launched another startup, xAI, in March last year and the company recently raised $6 billion in venture funding.
Musk was asked by a shareholder at the meeting how important he is, personally, to the future of Tesla.
“I’m a helpful accelerant to that future,” he said, emphasizing his role in innovation.
He said that, when it comes to humanoid robots, other companies, including tech startups, are going after the market. Competitors include Boston Dynamics, Agility, Neura and Apptronik.
“What really matters is, can we be much faster than everyone else and our product be done a few years before theirs and be better,” Musk said.
WATCH: Tesla shareholders approve Musk’s $56 billion pay package
Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.
