Tesla CEO Elon Musk took a combative stance on the future of humanoid robots during Tuesday’s earnings call, making bold claims about Tesla’s position in the market while raising concerns about Chinese competition.
The tech pioneer stated, without qualifying his claim:
With respect to humanoid robots, I don’t think there’s any company in any country that can match Tesla. Tesla and SpaceX are No. 1, and then now, I’m a little concerned that on the leaderboard, ranks two through 10 will be Chinese companies, but I’m confident rank one will be Tesla.
Bullish Claims Amid Strong Competition
Musk’s confidence comes despite the fact that homegrown competitors like Figure AI have secured huge commercial contracts, including a deal with BMW that has already shown practical applications. Recent footage shows Figure’s robots assembling BMWs on production lines, demonstrating real-world usefulness rather than just potential.
Tesla’s Optimus robots, while equipped with AI capabilities for human interaction and computer recognition, have yet to demonstrate the same level of commercial viability. Musk has previously hyped the project, claiming it could generate more than $10 trillion in revenue, but concrete evidence of this potential remains elusive.
Chinese companies are also making rapid advances.
Hangzhou-based Unitree Robotics has begun consumer sales of humanoid robots through e-commerce platforms, while Shanghai’s Agibot (also known as Zhiyuan Robotics) is matching Tesla’s ambitious production goal of 5,000 robots this year.
Chinese firms have already captured global attention with demonstrations like Unitree’s dozen humanlike robots dancing at the annual Lunar New Year gala.
The Rare Earth Excuse
When pressed about production issues, Musk blamed China’s export restrictions on rare earth magnets, potentially using this as an excuse for delays.
“Optimus was affected by the magnet issue from China,” Musk claimed, adding that he’s hopeful to get a license to “use the rare earth magnets.” He noted that Chinese authorities have requested assurances that these magnets won’t be used for military purposes.
Offering up potential reasons for this supposed unfair treatment, Musk claimed:
China wants some assurances that these aren’t used for military purposes, which obviously they’re not. They’re just going into a humanoid robot.
This explanation comes conveniently as Tesla struggles with broader business challenges, raising questions about whether the rare earth issue is a genuine obstacle or a potentially convenient explanation for production delays.
Humanoid Robots – The Next AI Frontier
The stakes in this competition couldn’t be higher.
Bank of America analysts predict global annual sales of humanoid robots could reach 1 million units by 2030, with 3 billion in operation by 2060. These robots are expected to fill crucial roles in manufacturing and service sectors.
Steve Westly, founder and managing partner of The Westly Group and former Tesla Board member, told CNBC that the company needs to find a new growth engine soon, highlighting the importance of successful robot development for Tesla’s future prospects.
Chinese manufacturers benefit from established supply chains, local adoption opportunities, and strong government support. According to Morgan Stanley research, China has led the world in “humanoid” patent filings over the past five years with 5,688 patents compared to just 1,483 from the United States.
Price competition is also a factor. Unitree’s G1 humanoid robot is priced at $16,000, potentially undercutting Tesla’s Optimus Gen2, which analysts estimate could cost around $20,000 per unit—and that’s only if Tesla can achieve economies of scale.
Musk’s confidence comes at a challenging time for Tesla, with the company reporting automotive sales tumbling 20% year on year to $14 billion and a nearly 40% drop in net income to $409 million in its latest quarterly report.
Whether Musk’s bold claims about Tesla’s dominance in the humanoid robot market will materialize remains to be seen, but the competition, particularly from China, appears to be gaining momentum faster than he might like to admit.
Have thoughts to add? Join the conversation on LinkedIn or Reddit—we’d love to hear your perspective.
