Musk Touts 'Sentient Humanoid' Robots Amid Tesla's Struggles

Tesla outlines new strategies amidst ongoing operational challenges

by Zain ul Abedin
Musk Touts 'Sentient Humanoid' Robots Amid Tesla's Struggles
© Leon Neal/Getty Images

In a bold move during Tesla's latest earnings call, CEO Elon Musk unveiled plans to market “sentient humanoid” robots by next year, a futuristic pivot as the electric car giant grapples with declining profits.

With his characteristic flair for dramatic announcements, Musk stated that these robots, dubbed "Optimus", could be operational in Tesla’s factories within the year and posited that they would eventually eclipse the value of Tesla’s automotive business.

Musk's optimism about the potential of humanoid robots comes at a critical time for Tesla, which reported a significant 55 percent drop in profits to $1.1 billion for the first quarter of the year. Revenue also declined by 9 percent to $21.3 billion, underscoring the company's financial challenges.

Earlier in the month, Tesla announced a 10 percent staff reduction, a strategic move to stabilize its financial position. Despite these setbacks, Tesla's stock surged over 10 percent in after-hours trading following the earnings announcement, suggesting investor confidence might still be robust, possibly buoyed by Musk’s ambitious robotics narrative.

Strategic Shifts and Visions

Tesla’s statement attributed its recent hurdles to factors beyond its control, including geopolitical tensions in the Red Sea and an arson incident at its Berlin factory. The company also hinted at strategic shifts, including accelerating the launch of new car models in response to various market pressures.

Musk also reiterated his vision for an electric vehicle-dominated future, likening gasoline-powered cars without autonomous features to obsolete horse-drawn carriages. Additionally, he projected a massive rollout of Tesla robotaxis, aiming for tens of millions of such vehicles within the next decade, despite his history of overpromising on timelines.

Discussions of Musk's compensation sharpened the focus on his involvement with Tesla. The upcoming shareholder vote on his $50 billion pay package, previously overturned by a Delaware judge, is pivotal. The compensation plan had faced scrutiny over its transparency and the enormous financial commitment to Musk.

Amidst these corporate maneuvers, Tesla is also contemplating a shift in incorporation from Delaware to Texas, which could influence how the company manages future legal challenges.