Humanoid robot kills Tesla $25K EV. Maybe Elon Musk should reconsider?
There was plenty of good news for investors and EV fans in Tesla’s latest earnings report. Vehicle deliveries grew by 87% in 2021, and the company’s earnings per share and revenue both beat analyst estimates by over 6%. Tesla also claimed that it achieved “the highest quarterly operating margin among all volume OEMs...demonstrating that EVs can be more profitable than combustion engine vehicles.” (So much for other automakers' claims that EVs are money-losers.)
Above: It looks like the lower-priced Tesla EV is getting sidelined for the 'Optimus Subprime' robot project (Unsplash: Austin Ramsey)
Another unsurprising but welcome tidbit: Tesla confirmed that Model Y production has begun at Gigafactory Texas, and that it’s only waiting for final certification to start deliveries.
As usual, TSLA stock tanked immediately following the earnings report—over 10% in a day—but soon recovered the loss. However, the announcement that the launch of Tesla’s Cybertruck and Semi will be delayed until “hopefully next year” still seems to be a drag on TSLA’s prospects, at least in the near term.
Another topic that concerns some Tesla supporters is a sense that the company is straying from its mission of electrifying transport. At a time when the company should be calling all hands on deck to bring its new vehicles to market, the mercurial Mr. Musk spent much of his time on the earnings call discussing other projects. Explaining why Tesla isn’t working on a new, lower-priced model, he conceded, “We have enough on our plate right now, too much on our plates, frankly.”
An overloaded plate is a common problem in our spoiled society, but an overeager visitor to an all-you-can-eat buffet can always remove the lime Jell-O and sheet cake from their tray in order to make room for meat and potatoes.
Tesla seems to have plenty of room on its plate for robotaxis. “The thing that overwhelmingly matters is when is the car autonomous,” said Musk, adding that “my personal guess is that we’ll achieve Full Self-Driving this year.” A certain Tesla-bashing web site claimed that this is the ninth year in a row that Musk has made that prediction.
Above: Elon Musk expands on his vision for Tesla's humanoid robot and how it can be used in the future (YouTube: Lex Clips)
Also occupying a prominent place on the piled-high plate is the humanoid robot now dubbed (with an unintentional second level of irony) Optimus Subprime. “In terms of priority of products, I think actually the most important product development we’re doing this year is the Optimus humanoid robot,” said the man who, in his younger days, donned his armor and set out to slay the dragon of climate change.
As for the practical purpose of this robot, Musk served up only this word salad: “The foundation of the economy is labor. Capital equipment is distilled labor. So what happens if you don’t actually have a labor shortage? I’m not sure what an economy even means at that point. That’s what Optimus is about, so, very important.”
Most of the EV press devoted little ink to the robot, preferring to focus on the positives in the report. However, Electrek called the announcement “quite a surprising change of strategy.” Autoblog was skeptical of Musk’s claim that the robot “has the potential to be more significant than the vehicle business,” calling it (with understatement) “a tall order, at least from an earnings perspective.”
As intended, the Lost In Space reject got a lot of headlines in the mainstream media, though not much respect. CNBC called the robot project “an example of Musk’s showmanship,” and lamented that “it’s more important for Tesla to make a robot than new car models this year,” but injected a hopeful note, speculating that the robot “could be years away and may never come to fruition.”
Actually, given Tesla’s robust demand and constrained supply, it’s probably not a bad idea for the company to defer introducing new models at this time. However, it’s definitely a bad idea to divert resources from getting the highly-anticipated Semi and Cybertruck into production, while hyping a creepy vanity project that has nothing whatsoever to do with Tesla’s stated mission.