Tesla Slashes Car Lines for Optimus
Tesla is slashing its Model S/X production lines to make room for mass manufacturing the Optimus humanoid robot. This signals a major strategic pivot to "physical AI," setting up a direct clash between Tesla's closed-stack approach and the open, Nvidia-powered ecosystem used by its rivals.
The Optimus robot leverages the same core AI as Tesla's vehicles, running on a custom Full Self-Driving (FSD) computer and trained on video data from millions of cars. This training is processed by Tesla's own Dojo supercomputer, which was designed specifically for machine learning workloads. The latest version, Optimus Gen 2, stands 168cm tall, weighs 57kg after a 10kg reduction from the first generation, and can handle a 20kg payload. Its hands feature 11 degrees of freedom and tactile sensing, with a newer "Gen 3" version doubling that dexterity to 22 degrees of freedom. This move positions Tesla against a growing field of humanoid robot developers. Key rivals include Figure AI, which has a partnership with BMW; Boston Dynamics, whose new all-electric Atlas will be deployed in Hyundai factories; and Agility Robotics, which already has its Digit robot working in Amazon warehouses. Many competitors utilize Nvidia's open robotics platform, which combines Jetson hardware with the Isaac software development kit. This ecosystem allows companies to accelerate development by using the Isaac Sim tool within the Omniverse platform for physically accurate simulation and synthetic data generation. Tesla's long-term goal is to produce up to one million Optimus units annually, a figure that dwarfs the entire current global production of approximately 500,000 industrial robots per year. The company is targeting a price point under $20,000 for the robot in the long run, with initial commercial sales estimated at around $30,000 by late 2026. To make room, production of the Model S and Model X will cease in the second quarter of 2026 at the Fremont, California factory. These two models, which first launched in 2012 and 2015 respectively, accounted for roughly 3% of Tesla's 1.64 million vehicle deliveries in 2025.
