How Optimus Could Dominate the Robotics Market in 2026

There may be no other US-based, publicly traded company that is betting its future so much on robotics. Tesla’s (NASDAQ:TSLA). The company is in the throes of transitioning from its electric vehicle (EV) business to humanoid robots, a market that could reach $3 trillion by 2050.

Success is anything but guaranteed, but there are several reasons why the company has been able to dominate the market. robotics market this year.

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Tesla is already working on the third generation Optimus humanoid robotAs the company recently said, “it’s our first design for mass production.” This could give the company an advantage over its rivals as Tesla irons out some early software and hardware bugs.

Tesla is also putting Optimus robots in some of its factories for real-life testing of manual tasks. Tesla CEO Elon Musk said on the fourth-quarter 2025 earnings call that Optimus is not yet being used to perform essential tasks in its factories, but rather “so the robot can learn.”

Moreover, Musk is leveraging artificial intelligence (AI) company xAI to develop an artificial intelligence system for Optimus. Tesla has years of experience integrating software and hardware into its vehicles, and now pairing that experience with the AI ​​company could help the company excel in its robotics goals this year.

Tesla is halting production of its Model S and Model X electric vehicles and converting those factories to producing Optimus robots, Musk said in the company’s last earnings call. Although this requires time and money, having existing production facilities that can mass produce high-tech robots is definitely an advantage.

To help finance the transition, Tesla is increasing its spending this year and will more than double its capital expenditures (capex) to $20 billion. Musk has set a goal of eventually producing 1 million Optimus robots a year, saying they could cost between $20,000 and $30,000. However, it is noteworthy that Musk has said that significant Optimus production volume will not begin until the end of this year.

While Tesla is moving full speed ahead towards robotics, the majority of its revenue still comes from electric vehicles, and sales are falling while losses mount. Automotive revenue is down 10% in 2025 and total sales are down 3%; This marks the first annual sales decline in the company’s history. To make matters worse, Tesla’s generally accepted accounting principles (GAAP) earnings fell 47% to $1.08 per share for the year.

This makes Tesla’s increase in robotics spending even more concerning because it’s unclear how Tesla will fund the expansion amid pressure on EV sales.

Tesla’s stock is trading at 386 times the company’s trailing 12-month earnings, making the company’s shares very expensive at a time when Tesla is investing heavily in robotics. All of this means that while Tesla may lead the robotics market this year, I wouldn’t feel comfortable buying shares just yet.

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Chris Neiger It has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a feature disclosure policy.

Tesla’s $3 Trillion Opportunity: How Optimus Could Dominate the Robotics Market in 2026 originally published by The Motley Fool