In just a decade, Tesla grew its electric vehicle sales from 32,000 units to 1.8 million — making it, for most of that stretch, the world’s largest seller of pure EVs. But while it was aggressively ramping up EV production, the company was also changing its mission.
In 2006, CEO Elon Musk said Tesla’s purpose was to transition the world from fossil fuels to solar power and EVs. In recent years, Musk has turned his focus elsewhere.
“Tesla is arguably the world’s biggest robotics company,” Musk said at Tesla’s “AI Day” in 2021. “Because our cars are semi-sentient robots on wheels.”
Last year, Chinese automaker BYD stole the title of world’s biggest EV producer. But in October, Musk was already sharing a new vision for his company. He unveiled the prototype for a robotaxi called the Cybercab, a larger Robovan, along with a gaggle of dancing robots. A short while after that, Tesla abandoned a project to make a $25,000 EV, which Musk called “pointless.”
It’s a costly pivot.
Last April, Musk said Tesla was on track to spend $10 billion on autonomous cars by the end of the year. It’s planning a rollout of a driverless ride-hailing system in June in Austin, Texas. It also plans to make 5,000 of its Optimus humanoid robots in 2025, though the company has parts for 12,000, according to comments Musk made at a Tesla all-hands meeting in March.
“The only company with all the ingredients for making intelligent humanoid robots at scale is Tesla,” he said. “This is a super big deal. Like, my prediction is that on this front is that Optimus will be the biggest product of all time by far. Nothing will even be close.”
Musk, who is no stranger to hyperbole, said “I think it’ll be 10 times bigger than the next biggest product ever made.”
Tesla bulls say robots are a big part of the company’s future.
“If you’re buying Tesla because they sell EVs to you and to the public, the stock is overvalued” said Stephen Gengaro, an analyst at Stifel, who has a buy rating on the shares. “If you’re buying it because there’s a very large growth opportunity in their energy storage and generation business, and there’s a very large growth opportunity in Optimus and FSD and robotaxi, then the stock really can work.”
Skeptics say Tesla has abandoned its original mission, and that the new initiatives won’t pay off.
“Tesla’s mission is to advance sustainable transportation and energy,” said Ross Gerber, CEO of Gerber Kawasaki and a long time shareholder in the company. “It was never to create robotaxis and humanoid robots. And and that’s Elon just changing Tesla’s mission. But the original mission of Tesla is fundamentally important to the planet, and we need to keep that mission alive, keep selling EVs, keep selling battery systems and solar and all this.”
Gerber says there’s also a business reason to stay focused on cars.
“When you think about like consumer robotics, it’s like, good luck with that,” he said. “So now we’ve got two pie-in-the-sky-businesses versus just selling a $25,000 or a $20,000 EV, where you have a market of potentially hundreds of millions of people.”
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Read More: Why Tesla’s turn to robots has divided Wall Street