Elon Musk frets over controlling Tesla’s ‘robot army’ as car biz rebounds slightly

Tesla’s report gross sales quarter has provided the corporate a reprieve after a horrible begin to 2025. However CEO Elon Musk is targeted on constructing a “robotic military” and making good on his years-long, unfulfilled promise of self-driving automobiles — duties he wants to perform if he’s to unlock the total worth of the $1 trillion compensation package deal that Tesla desires to award him.

The stress between Tesla’s present automotive-driven enterprise and the AI-centric one which Musk is aiming for has by no means been extra clear.

Tesla delivered a report variety of automobiles within the third quarter of 2025, thanks largely to a rush of shoppers in the USA who took benefit of the expiring federal EV tax credit score. However that report quarter didn’t result in larger earnings. The truth is, Tesla’s third-quarter revenue was nonetheless 37% decrease than it was in the identical quarter final 12 months.

Tesla shipped 497,099 automobiles within the third quarter, which generated $21.2 billion in automotive income — the corporate’s greatest income determine in additional than a 12 months. However Tesla solely pulled in a revenue of $1.4 billion, up simply $200 million from the second quarter of this 12 months, based on a shareholder letter released Wednesday. The report quarter got here after an abysmal begin to the 12 months for Tesla, which noticed gross sales drop mightily in part because of Musk’s involvement with the Trump administration.

The corporate defined within the letter {that a} huge enhance in working bills — 50% larger in comparison with the third quarter final 12 months — was one of many culprits. That working expense bump was due to spending on AI and different R&D initiatives, in addition to “restructuring” expenses of practically $240 million. Tesla didn’t clarify what these restructuring expenses had been for, nevertheless it’s probably associated to the latest resolution to shut down the company’s six-year-old Dojo supercomputer project.

Tesla cited tariffs as one other drag on income this previous quarter, which means Musk spent round $300 million to assist elect a president who has harm the corporate’s enterprise. Tesla’s chief monetary officer, Vaibhav Taneja, mentioned on a convention name Wednesday the tariff hit was about $400 million.

“We’re at a vital inflection level for Tesla and our technique going ahead as we deliver AI into the actual world,” Musk mentioned on the decision. Tesla is on the “starting of scaling, fairly massively, Full Self-Driving and Robotaxi, and basically altering the character of transport,” he mentioned.

All of this can put much more strain on the corporate’s remaining quarter of the 12 months.

Tesla already wants one other report quarter (after which some) if it desires to easily match the variety of automobiles it shipped in 2024 or 2023. The corporate may get some assist from the brand new slightly cheaper stripped-down versions of the Mannequin 3 and Mannequin Y EVs. However even in that best-case state of affairs, Tesla is method off the trail of fifty% year-over-year progress that it as soon as promised to traders and shareholders.

However Musk has spent the previous couple of years making an attempt to get shareholders, traders, staff, and everybody else to look past the corporate’s core enterprise of constructing and promoting automobiles. He’s wager the way forward for Tesla on with the ability to create an enormous community of self-driving automobiles that he thinks can problem Uber. And he thinks the humanoid robotic, Optimus, will grow to be the best-selling product ever.

Tesla provided little new data on these packages in Wednesday’s letter. Musk mentioned on the convention name that Tesla might begin constructing the third model of Optimus within the first quarter of 2026. He had as soon as promised to construct hundreds of the robots by the top of this 12 months, however as The Info has reported, Tesla has run into problems in early production with Optimus.

“Bringing Optimus to market is an extremely tough process, to be clear. It’s not like some stroll within the park,” Musk mentioned.

However Musk continued Tesla’s gauzy, unspecific claims about how a lot Optimus will change the world. “You may truly create a world the place there isn’t any poverty, the place everybody has entry to the best medical care,” he mentioned. “Optimus can be an unbelievable surgeon.”

The elevated deal with AI, robotics, and self-driving automobiles (together with beginning manufacturing of the two-seater “Cybercab”) may also value Tesla extra subsequent 12 months. Taneja mentioned capital expenditures will enhance “considerably” in 2026 due to these initiatives. He additionally mentioned Tesla has needed to enhance employee-related spending to remain aggressive within the ongoing AI expertise warfare.

Tesla’s third-quarter outcomes come amid the backdrop of the corporate’s proposal to hand $1 trillion worth of shares to Musk. That plan is up for a vote on the Tesla’s annual shareholder assembly in a couple of weeks. The corporate — and Musk — are campaigning exhausting. Whereas advisor groups like ISS and Glass Lewis are recommending in opposition to the pay package deal, it’s almost certainly going to move given the overwhelming help from shareholders on earlier efforts.

That hasn’t stopped Musk from threatening to stroll away from Tesla if the package isn’t approved.

On Wednesday’s name, he reiterated his declare that he cares extra in regards to the voting management the compensation package deal would afford him than the cash.

“I simply don’t really feel comfy constructing a robotic military right here after which being ousted due to some asinine suggestions from ISS and Glass Lewis, who don’t have any friggin’ clue. I imply, these guys are company terrorists,” Musk mentioned.

This story has been up to date with new data from Tesla’s third-quarter convention name.