Tesla Starts Building Optimus Robots in Fremont as Q3 Profit Slumps 43%

Tesla has begun assembling its Optimus humanoid robot at the Fremont, California plant — a facility that for years churned out electric cars. The company confirmed the milestone in its third-quarter shareholder letter, saying the units now leaving the line are “the first production-quality bots” it has built.

That forward-looking headline couldn’t rescue the rest of the quarter. Tesla posted a **43% drop in net income to $787 million**, down from $1.37 billion a year earlier, as spending on robotics, AI and self-driving software climbed steeply.

A car business standing still

Vehicle sales still pay the bills, but they aren’t growing. Automotive revenue landed at roughly $20 billion, flat versus a year ago. Tesla handed over 486,532 vehicles in the quarter — about 6,000 more than the prior quarter, yet fewer than in the same stretch of 2025.

Total revenue came in at $28.04 billion, a hair under the $28.09 billion booked a year earlier and roughly $200 million below the previous quarter's $28.23 billion.

Q3 by the numbers: $28.04B revenue · $787M net income (−43% YoY) · 486,532 vehicles delivered · $4.6B services revenue (+33%) · $2.8B energy revenue (−16%)

The energy division didn’t help. Solar and storage revenue fell 16% to $2.8 billion, which Tesla attributed to customer refunds tied to tariffs. Weaker sales of regulatory credits also squeezed the bottom line.

Where the money actually came from

One bright spot stood out: services and other, the bucket that houses subscriptions to Tesla’s Full Self-Driving driver-assistance software. It grew **33% year-over-year to $4.6 billion** and delivered a record $734 million in gross profit — a figure that kept the quarter in positive territory.

CEO Elon Musk has spent much of the past two years telling investors Tesla is an AI and robotics company that happens to sell cars. The Q3 report reads like the bill for that pivot arriving all at once.

• Robots: Optimus is now in production, though Tesla says hardware and manufacturing will keep evolving.
• Software: FSD subscriptions are growing fast enough to matter to margins.
• Autonomy: Heavy spending on self-driving remains a drag on profit.
• Energy: Tariff refunds dented an otherwise steady segment.

The Fremont line itself is symbolic. Space once reserved for vehicle assembly is now stamping out bipedal machines, and Tesla insists the process is already fit for a commercial product.

Whether Optimus ever generates meaningful revenue is another question — and one investors will likely keep asking while car sales stay flat.