Optimus was a major point of coverage at the 2024 Tesla Shareholder meeting, and we’ll help break down some of the key points for those interested in Tesla’s future humanoid robots.
What Is It?
Optimus is Tesla’s humanoid robot, built entirely in-house, from the batteries to the motors and actuators in the arms, legs, and hands. Tesla has taken a unique design approach to Optimus and intends to have it replace humans in mundane or risky tasks.
It is a bipedal robot, built around the same aspect as the human body. Optimus was originally unveiled in August 2021 and has since seen several major design iterations. And those aren’t the only ones, Optimus is scheduled to undergo at least one more major design revision this year, as well as one more major design revision for its hands – which will feature 22 degrees of freedom.
In comparison, the human hand has 27 degrees of freedom – Tesla is quite close to replicating the complexity of a hand in its custom-designed hands. Musk mentioned that with the 22 degrees of freedom, Optimus is capable of learning and playing music on a piano – an intricate task that many humans find difficult today.
Best of all, they’ve placed the immense learning prowess of FSD behind its brains – each Optimus unit runs similar hardware and software as Tesla cars . It can also navigate autonomously, using the same object recognition and learning that Tesla’s cars use every day. Optimus learns from watching humans do things or can be taught how to do something by a remote operator. Elon Musk also mentioned that it will eventually be able to watch a video and learn how to do a task.
What Can It Do?
Elon Musk has mentioned that Optimus’ primary goal is to replace humans in certain tasks, especially those that could put a human at risk. This could be anything from being a humanoid companion or caretaker, a construction worker, or even working in factories. Of course, it has a focus on high-precision tasks, owing to its intricately designed hands, and is intended to replace human workers doing everyday precision work that robots today cannot do.
The primary goal is to have Optimus robots begin working in factories, and to this end, two have been deployed to one of Tesla’s factories, and are working on the battery cell assembly lines in a prototype and testing deployment. Today, these two units are moving battery cells off the production line and into shipping containers.
2:1 Robot to Human Ratio
There are some ambitious plans for Optimus – Elon Musk envisions that there will be 2 humanoid robots for every human on the planet in the future. This is alongside an eye-watering build rate of 1 billion humanoid robots a year – of which Tesla intends to build at least 100 million per year or more.
With these numbers, Tesla sees the market cap for Optimus as double that of FSD – approximately $20 trillion, with an expected profit of $1 trillion per year at scale. That’s an expected profit of $10,000 per unit, which will be quite the achievement.
When’s It Coming?
Given the fact that Tesla still has design revisions planned, scale production isn’t starting anytime soon. However, Elon Musk did mention that Tesla currently plans to have approximately 1000 to 2000 Optimus units deployed for internal use in Tesla factories by the end of next year. This limited production run will be the start of Tesla’s larger Optimus deployments and will serve to help them refine the FSD stack that runs Optimus, helping teach it the many tasks it could do in a factory.
Costs
The next big question is what it will cost. Musk has mentioned that it will cost less than a car – with an expected cost of $20,000 USD, once large-scale production kicks off. Just like the Cybertruck, that means initial adopters will be faced with fairly high adoption costs for the initial production runs. Economies of scale will eventually lower the cost as more units are produced.
One of Tesla’s significant challenges will be scaling to reduce these costs. Currently, each unit is hand-built in Tesla’s Optimus labs. Eventually, this will have to scaled up to a proper production line, which will require a factory. Optimus also uses 4680 cells, which means some production of the newer 4680 batteries will be required to produce Optimus.
So perhaps, someday soon, there will be an Optimus knocking on your door, delivering itself to help you take care of your home. Definitely a bright future to look forward to.
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Did you know the Cybertruck’s air suspension automatically levels the truck, even while it’s asleep? This is a great feature, especially for camping or off-road adventures. However, it can be an issue when lifting a wheel to change a tire.
Fortunately, there’s a solution: Jack Mode.
Jack Mode
Jack Mode is made for jacking up the truck and prevents the Cybertruck from self-leveling.
To enable Jack Mode, you’ll first need to set the Ride Height to Medium from Controls > Dynamics > Ride Height. You can also set it from the Tesla app by navigating to the Controls section and sliding up until you see Ride Height. This will give you enough clearance for most jacks to get under the truck and lift it.
You can also activate Jack Mode in Low or High, but Tesla recommends a Medium ride height for best control of the vehicle and sufficient tire clearance to safely remove and reinstall the tire. However, once the vehicle is in Jack Mode, the Ride Height cannot be changed.
Next up, go to Controls > Service > Jack Mode to enable Jack Mode. The vehicle will warn you that Jack Mode is enabled and can either be disabled by pressing the button again or by putting the vehicle into drive.
For the duration that Jack Mode is active, it is safe to lift your Cybertruck, even on one side only. It will not self-level for the duration that Jack Mode is enabled.
Automatic Jack Mode
Jack Mode can also activate automatically to protect the suspension from potential damage. For example, if the vehicle’s bumper is resting on a curb, Jack Mode may engage on its own.
Once the obstacle is cleared, or if you shift into Drive or Reverse, Jack Mode will automatically be disabled.
On March 27, the U.S. Administration announced a 25% tariff on all imported vehicles and foreign-made automotive parts, an attempt to strengthen domestic manufacturing. Currently, Tesla and Rivian stand out as the major EV automakers with a predominantly U.S.-built lineup.
In this analysis, we’ll explore the potential impact of these tariffs, examining key factors and what they mean for the industry moving forward.
Percentage of American Parts
One key item we want to point out here before we continue is that the NHTSA defines North American made parts as parts built in either the United States or Canada - Mexico is not included in this number. In November 2024, we found out the percentage of parts Tesla uses that come from the U.S. and Canada. At the top we have Tesla’s Model 3, which uses 75% North American parts.
We’ll be sticking with overall percentage of North American parts since we don’t actually know what percentage Tesla sources from Canada. We do know today that some cameras, essential die parts, and other key components are sourced from Canada for nearly every vehicle in Tesla’s lineup - so it isn’t an insignificant percentage.
Insulated from Tariffs?
At first glance, Tesla may seem insulated from these tariffs. However, its dependence on a global supply chain—particularly parts moving across the U.S.-Canada border under the US-Mexico-Canada Agreement (USMCA)—adds complexity to the equation. Additionally, potential retaliatory tariffs from Canada could further pressure Tesla, a trend already evident in the company being excluded from multiple EV incentives across the country.
While Canada isn’t Tesla’s largest market, it still accounts for a meaningful share of sales. Even a small decline in that market could have a noticeable impact on the company’s bottom line.
Domestic Advantage
Tesla’s domestic advantage is impressive—it manufactures all vehicles sold in North America at just two facilities: Tesla Fremont and Gigafactory Texas. The initial 25% tariff, set to take effect on April 2, 2025, applies to cars and light trucks assembled outside the U.S., likely dealing a heavy blow to competitors like Hyundai and Volkswagen. According to a Goldman Sachs report, these tariffs could drive up vehicle prices by $5,000 to $15,000.
However, this advantage is partially offset by exemptions under the USMCA. To avoid the full tariff, vehicles and parts must meet a strict “rules of origin” requirement, meaning at least 75% of components must come from the U.S., Canada, or Mexico. This exemption remains in place until May 3, 2025, when the second stage of tariffs kicks in—targeting non-U.S. content more directly.
Effectively, the NHTSA and USMCA’s existing framework for defining “North American-made” components is being upended. This shift plays to Tesla’s strengths, but to understand the full impact, we need to take a closer look at its supply chain.
Supply Chains
Tesla’s supply chain is deeply integrated across North America. Approximately 25% of the Model 3 Long Range RWD and AWD comes from Mexico - and some undefined percentage also comes from Canada. That number rises significantly for the other vehicle’s in Tesla’s line-up, which is available in the chart below from early November 2024.
Phase 2 of the tariffs will place an increasing impact on Tesla - especially as it won’t be simple nor quick for Tesla to move all part production to the United States.
Vehicle
Pct made in US/Canada
Model 3 LR AWD/RWD
75%
Model 3 Performance
70%
Model Y (All Variants)
70%
Cybertruck
65%
Model S
65%
Model X
60%
Battery Production
This is particularly evident in Tesla’s reliance on Canadian minerals, which are crucial for its battery production. Tesla sources key materials like nickel, lithium, and cobalt from Canadian mines, with most of these resources being shipped across the border in an unrefined state. Currently, these shipments face a relatively low 10% tariff from Canada. However, potential retaliatory tariffs could drive costs higher or even restrict access to these essential minerals.
While limiting access may seem extreme, Ontario has already threatened to halt nickel exports from Canada’s largest nickel mine to the U.S.—a move that could pose a serious challenge for Tesla.
Even Elon Musk has acknowledged that Tesla won’t emerge from these tariffs unscathed.
Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.
Tariffs are rarely a one-way street. Canada and Mexico are likely to respond with retaliatory tariffs on U.S.-made auto parts or vehicles. Both countries have already explored reducing EV incentives by excluding Tesla from certain rebates. Additionally, there have been discussions about imposing tariffs specifically on Tesla, partly due to Elon Musk’s political involvement.
Consumer Impact
Several scenarios impacting consumers can unfold in response to these upcoming tariffs.
In the short term, higher prices for competitors could drive more customers toward Tesla as they seek more affordable products. However, increased import costs could force Tesla to either absorb the expense or raise prices—potentially offsetting any sales gains.
Cox Automotive, a leading industry analyst, has warned that by mid-April 2025, North America could see reduced production, tighter supply, and rising vehicle prices. Tesla, despite its domestic production, won’t be immune to these effects due to its reliance on a continental supply chain.
To mitigate long-term costs, Tesla could explore securing domestic mineral rights—an expensive move initially but one that could provide stability if tariffs remain in place for years under the current administration.
However, Tesla CFO Vaibhav Taneja acknowledged during the Q4 2025 Earnings Call that the company remains heavily dependent on global parts sourcing. Given Tesla’s own admission of the impact, consumers should expect price increases as the company adjusts to the shifting trade landscape.
What to Take Away
Overall, the 25% tariff presents a double-edged sword for Tesla. While it may offer short-term advantages by making competitors’ vehicles more expensive, long-term, Tesla will also be impacted. Tesla’s reliance on cross-border parts, coupled with potential retaliatory tariffs, could quickly escalate costs and increase vehicle prices.
As the political landscape around tariffs continues to evolve on what seems to be a daily basis, Tesla will need to navigate these changes carefully. Tesla’s supply chain has been optimized for cost-effectiveness and efficiency. Any changes that happen could be driven by the new tariffs. Tesla may be forced to make changes that prioritize reducing tariff costs, potentially at the expense of efficiency. However, if these policies continue to evolve or if tariffs are later removed, Tesla is then stuck with a less-efficient supply change.
The company will likely address these challenges in detail during the Q1 2025 Earnings Call, though that remains several weeks away.
