Elon Musk Highlights Robotaxi, Optimus Over EV Demand in Tesla Earnings

Tesla’s third-quarter earnings call left analysts and investors with more questions than answers.

CEO Elon Musk notably avoided discussing key performance indicators, including demand for Tesla’s electric vehicles following the lapse of a significant federal tax credit. The highly anticipated Cybertruck and the ongoing impact of tariffs on auto part imports were also conspicuously absent from the conversation. Furthermore, the call provided no concrete guidance on the company’s prospects for the crucial fourth quarter.

The market reacted swiftly, with Tesla’s stock dipping nearly 4% in after-hours trading, signaling investor unease.

Instead of addressing immediate financial concerns such as sales figures, profit margins, and earnings (which, notably, fell short of expectations), Musk pivoted to his long-standing strategy of outlining ambitious, futuristic visions, with robotaxis taking center stage. Musk asserted his conviction that investors and the broader public are underestimating the disruptive potential of this technology.

“People just don’t quite appreciate the degree to which this will take off — where it’s honestly — it’s going to be like a shock wave,” Musk declared during his opening remarks. “We have millions of cars out there that, with a software update, become full self-driving cars and, you know, we’re making a couple million a year.”

For years, Musk has painted a picture of Tesla’s EVs transforming into revenue-generating assets for their owners, autonomously generating income through ride-hailing and delivery services. However, while competitors like Alphabet’s Waymo are actively expanding their commercial robotaxi services into new markets, and Baidu’s Apollo Go is gaining traction in China and beyond, Tesla’s autonomous ride-hailing efforts remain confined to limited pilot programs. This discrepancy raises concerns about Tesla’s ability to deliver on its promises within a reasonable timeframe.

During Tesla’s previous earnings call in July, Musk boldly predicted that autonomous ride-hailing would be accessible to “probably half the population of The U.S. by the end of the year.” Yet, the reality is that Tesla has yet to produce or sell vehicles that are certified safe for driverless operation, requiring constant human supervision.

During the call, Musk stated ambitions to launch a driverless robotaxi service in Austin by year’s end, and that by the close of 2025, such a service should be running but with drivers on board, in 8 to 10 cities.

Concerning the current installed base of Tesla vehicles, CFO Vaibhav Taneja acknowledged that adoption of FSD Supervised, Tesla’s Level 2 partial automation system, remains limited, with only 12% of users subscribing to the system. Taneja refrained from disclosing the average revenue generated per subscriber, particularly after recent promotions aimed at boosting adoption rates. This lack of transparency further clouds the financial picture surrounding FSD.

In its investor presentation, Tesla revealed that FSD revenue lagged behind the same period last year, when it totaled $326 million. This implies that FSD contributed less than 2% of Tesla’s total revenue for the most recent quarter. The relatively small contribution raises questions about the near-term profitability of Tesla’s autonomous driving efforts.

Beyond robotaxis, Musk reiterated his long-term vision for humanoid robots, asserting that Optimus has the “potential to be the biggest product of all time.”

Optimus is Tesla’s bipedal humanoid robot, currently in development and without immediate commercial applications. Musk has previously suggested that Optimus robots will possess the capabilities to serve as factory workers or even childcare providers.

On Wednesday’s earnings call, Musk escalated expectations even further.

“Optimus will be an incredible surgeon,” Musk stated. He further suggested that the combination of Optimus and self-driving technology could “actually create a world where there is no poverty, where everyone has access to the finest medical care.” This ambitious claim draws a direct line between Tesla’s technological advancements and a broader societal transformation.

Musk indicated that Tesla anticipates showcasing a new iteration of Optimus, dubbed V3, in the first quarter of 2026. However, concrete details regarding the robot’s capabilities and deployment timeline remain scarce, leaving investors to speculate about the viability of this long-term project.

Musk pivoted the focus toward robots toward the end of the call, combining it with another topic: his compensation package.

In September, Tesla introduced a new compensation plan that could reach $1 trillion and boost Musk’s ownership stake by 12%. Tesla’s annual shareholder meeting in early November will include a vote on this plan.

“If we build this robot army, do I have at least a strong influence over that robot army?” Musk questioned during the call. “I don’t feel comfortable building that robot army if I don’t have at least a strong influence.” This statement underscores Musk’s desire to maintain significant control over Tesla’s future trajectory, particularly in the realm of robotics.

He also directed criticism toward proxy advisory firms Institutional Shareholder Services (ISS) and Glass Lewis, following their recommendations against approving his new pay plan.

Musk said ISS and Glass Lewis “have no freaking clue,” and described them as “corporate terrorists.” This demonstrates Musk’s willingness to challenge conventional corporate governance practices when he perceives them as impediments to his vision.

Tesla continues to rely heavily on auto sales for the bulk of its revenue. The 12% revenue increase in the third quarter compared to the previous year followed two consecutive year-over-year declines. Analysts anticipate a further decrease of around 2% in the upcoming fourth quarter.

Notably absent from the call was any discussion of immediate strategies Tesla may be considering to revive consumer enthusiasm for its vehicles.

Tesla’s brand perception has declined. The Interbrand 2025 Best Global Brands list, released earlier this month, shows Tesla’s brand ranking declining to 25th down from 12th in 2024. The Interbrand report noted “Tesla was once the main disruptive force in the automotive industry,” but said the CEO’s activities combined with a shortage of new products “has led to concerns about Tesla’s ability to sustain high margins.”

Tesla investors used the company’s online forum to ask about new products currently in the pipeline. But investor relations lead Travis Axelrod rejected the queries in Q&A sessions that followed the earnings headlines.

“This is not the appropriate venue to cover that,” he said.