Elon Musk's Tesla is in deep trouble.
This week, the company reported a massive 16 percent decline in automotive revenues, the biggest drop in over a decade. With tax incentives and auto regulatory credits being phased out by president Donald Trump, Musk conceded that the company is facing a "few rough quarters" ahead.
While Musk didn't manage to reassure investors about rescuing Tesla's car sales business — the company's shares plummeted following Wednesday's earnings call — the billionaire is attempting to point to something shiny: his plans to shift the firm's focus to humanoid robots and a robotaxi service.
The company launched an extremely limited pilot program for its autonomous ridehailing service in Austin earlier this summer. But early warning signs indicate the carmaker is many years away from catching up with Musk's characteristically lofty promises of selling millions of robotaxis, if ever.
Now another of the billionaire's promises is looking shaky too: his pledge to produce more than a million humanoid Optimus robots a year by the end of the decade. As The Information reports, the company is already facing severe bottlenecks that are slowing down production and endangering even its modest goals for 2025.
According to the publication's sources, Tesla is "well behind the pace" to meet Musk's goal of producing 5,000 Optimus robots this year, indicating the company will have to make dramatic changes to hit its CEO's targets.
Musk has said that the bipedal robot could increase Tesla's already astronomically high valuation to a staggering $25 trillion — which is increasingly hard to believe given the company's extended woes and plummeting earnings.
It's certainly nothing new for Musk, who has garnered a reputation and extensive track record of setting unrealistic timelines and goals. But now that Tesla's core business is in serious danger, the company may have even less leeway to turn things around.
The early warning signs are certainly there. Just last month, Tesla lost the leader of its Optimus division, former vice president of engineering Milan Kovac, leaving a big hole in the project's leadership.
According to The Information, technical problems related to Optimus' hands have become Musk's focus since leaving the White House. Matching the dexterity and performance of human hands is exceedingly difficult, sources told the publication.
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