Tesla’s (NASDAQ:TSLA) general counsel confirmed on Thursday that investors supported awarding Elon Musk stock options worth up to $55.8 billion. In response, Musk shared that the company’s robot-making efforts could eventually eclipse its car business.
Currently, Tesla has two humanoid robot prototypes in California that are moving battery cells from a production line into shipping containers. Additionally, several of these robots are operating around the company’s Palo Alto offices, Musk mentioned during the annual meeting.
Musk doesn’t anticipate the robot, named Optimus, to enter limited production until next year. Tesla plans to test a few thousand units in its own factories. Despite the early stage of development, Musk speculated that the robots could potentially generate around $1 trillion in annual profit for Tesla, though he did not specify a timeline.
“If the price-to-earnings multiple is, say, 20 or 25, that would mean a $20 trillion market cap from Optimus alone,” Musk said. “It’s within the realm of possibility for Tesla to achieve a valuation ten times that of the most valuable company today.”
Earlier this year, Musk issued an ultimatum to Tesla’s board, pushing for an increase in his stake to around 25%. He suggested that without this boost, he might prefer to develop AI and robotics products outside of Tesla.
Musk is known for setting ambitious goals and has a mixed record of achieving them on time. While he accurately predicted in 2019 that self-driving technology could make Tesla a half-trillion-dollar company, his repeated forecasts that Tesla cars would soon function as robotaxis have yet to materialize.
This isn’t the first time Musk has predicted that another aspect of Tesla’s business would rival car manufacturing. The company’s energy generation and storage products still generate only a fraction of its sales, despite Musk’s earlier claims that they could become as significant as its automotive operations.
Regarding Tesla’s core auto business, Musk was more cautious. “It’s tough sledding out there,” he said, noting that competitors like General Motors Co. and Ford Motor Co. have scaled back their electric vehicle production plans. “Now Tesla, we’re going to increase, but it is not an easy market.”
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