Tesla is betting its future on a two-legged robot. Here's where the project stands.

Tesla built its business on electric cars. Now the company is putting its future weight behind a humanoid robot called Optimus, according to a Business Insider report published July 24, 2026.

Elon Musk, Tesla's chief executive, has said Optimus could become the company's biggest product ever. He has predicted large numbers of the robots, which he calls "Optimi," could eventually work in factories, do household chores, and even help build more robots.

Tesla has not yet shown that Optimus can move through the physical world or do useful work without human help. The company also has not shown it can manufacture the robot at scale.

What Musk said this week

On Tesla's most recent earnings call, Musk gave few new details about Optimus. He lowered expectations for how fast production would grow. He said Tesla would begin producing its third-generation robot soon at a Fremont, California, factory.

Ashok Elluswamy, Tesla's AI chief, said on the same call that training could eventually push the robots to a "superhuman level" of capability, according to the report.

Musk told investors that production would ramp up slowly. He said there is no established supply chain yet for many of the parts Optimus needs.

A crowded market

Tesla is not alone in building humanoid robots. Agility Robotics has deployed its Digit robot across nine customer sites and plans to go public. Figure AI has announced robot deployments in logistics and distribution centers this year. Sunday Robotics, 1X, and Weave Robotics plan to ship robots into homes this fall.

Guy Hoffman, an associate professor of mechanical and aerospace engineering at Cornell University, called humanoid robots a "fantasy product" in comments to Business Insider. He leads Cornell's human-robot collaboration lab.

Hoffman said self-driving cars took about 20 years to reach the market after the underlying technology first worked. He said building a working humanoid robot is even harder, and no fully autonomous humanoid has been developed yet.

From costume to production line

Musk first introduced the idea in 2021, showing a person dancing in a robot costume and calling it the "Tesla Bot."

Three years later, Optimus robots danced, served drinks, and spoke with guests at a Tesla event called "We, Robot." The robots walked without help, but more complex actions, including pouring drinks and handing out desserts, were controlled by remote human operators, the report said.

Tesla has not revealed what its next Optimus model will look like. The report said the robot stands nearly six feet tall with a human-like shape. One unnamed Silicon Valley investor described that design to Business Insider as a "parlor trick."

Musk has defended the human-like form, arguing robots need to resemble people to perform the same range of tasks people do.

Chinese companies, including Unitree and UBTech, made about 90 percent of humanoid robot shipments last year, according to research firm Omdia, as cited in the report. Musk has said Optimus will be far more advanced than Chinese competitors, though he has not shared many details.

Three problems left to solve

According to the report, Musk has said Tesla must solve three problems to make Optimus work: giving it intelligence, giving it functional hands, and manufacturing it at a large scale.

For intelligence, Musk believes Tesla's self-driving car technology gives it a head start, since Optimus can use Tesla-designed chips and camera-based systems developed for its cars. Tesla has adapted its driving simulator to train virtual robots, and employees have recorded themselves doing factory tasks to generate additional training data.

Hoffman said Musk is underestimating the difficulty. He compared the difference between self-driving cars and humanoid robots to the difference between checkers and nuclear physics.

The second problem is what Musk calls the "hands problem," or building a robotic hand with the strength, precision, and flexibility of a human hand in a small space. Musk said Optimus is being designed for human and eventually superhuman dexterity, which has required Tesla to build custom motors, gears, and sensors.

The third problem is manufacturing at scale. Musk has warned that early production will be very slow. He has estimated that once Tesla reaches production of a million robots a year, each unit could cost around $20,000 to $25,000 to make. He has not given a clear timeline for reaching that production level.

Tesla stopped making the Model S and Model X at its Fremont factory earlier this year to make room for an Optimus production line built to eventually produce a million robots annually. A second line under construction in Austin, Texas is planned to reach a capacity of 10 million robots a year.

The first robots will enter what Tesla calls its "Optimus Academy," where they will practice tasks and generate data to improve their underlying AI systems. Musk has said 10,000 to 30,000 robots will refine their skills there.

Part of a wider AI strategy

Musk has talked about a broader "convergence" across his companies as they become more connected through AI, according to the report.

During the earnings call, shareholders and analysts asked Musk about a rumored merger between Tesla and SpaceX. Musk did not comment directly on the speculation but pointed to shared work across the companies' robotaxi and AI businesses.

Musk has said Optimus robots could work alongside technology from xAI, which SpaceX acquired in February. He said each robot could handle some tasks on its own, while xAI's Grok system could coordinate larger groups of robots, such as organizing a team of Optimus units to build a factory floor.