Tesla has commenced production of its Optimus humanoid robot at its Fremont, California factory, previously focused on electric vehicle assembly, the company revealed on Wednesday.
In its quarterly letter to shareholders, Tesla stated, “The robots rolling off this assembly line represent our first production-quality units. Although we will keep refining both the hardware and production methods, we have validated that the current process for manufacturing Optimus is adequate for a market-ready product.”
Despite this promising development, the company’s overall financial performance for the third quarter was lackluster. Revenue stagnated, and expenses surged as Tesla accelerated its investment in Optimus, artificial intelligence, and self-driving technology, resulting in a significant 43% decline in profits.
Most of Tesla’s revenue came from electric vehicles, which remained stable year-over-year at $20 billion. The company delivered 486,532 vehicles during the third quarter, slightly up by 6,000 units compared to the previous quarter, but down from the same quarter last year.
The overall revenue for the third quarter totaled $28.04 billion, slightly below the $28.09 billion reported in the same quarter of 2025. This also represented a decrease of about $200 million compared to the previous quarter’s $28.23 billion revenue.
Tesla’s solar and energy storage division experienced a 16% year-over-year decline, bringing in $2.8 billion, which the company attributed to customer refunds related to tariffs. Conversely, its services segment, which includes subscriptions to the Full Self-Driving technology, saw a 33% year-over-year increase, generating $4.6 billion.
Nevertheless, these gains did not compensate for the costs associated with its artificial intelligence initiatives and the Optimus robot, which significantly impacted profitability.
The company reported net income of $787 million, marking a 43% decrease from the same quarter in 2025, during which it earned $1.37 billion. A decline in regulatory credit sales also contributed to the pressure on profitability. Tesla remained profitable primarily due to a substantial gain from its “services and other” segment, which produced a record gross profit of $734 million for the quarter.
