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Elon Musk says Tesla ending Models S and X production, converting Fremont factory lines to make Optimus robots (www.cnbc.com)
submitted 9 months ago by to c/technology@lemmy.world
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[–] 80 points 9 months ago (33 children)

So basically the cars are not selling, but he doesn't want to be seen to be closing the factories.

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  • [–] 22 points 9 months ago*

    It's total bullshit. They don't need to do anything to the factory. They haven't made X and Y in Fremont for 2 years. There isn't anything to retool or any space to reuse.

    The factory already frequently takes manufacturing breaks for days at a time. If he had a robot to build, they have capacity, but let's not fool ourselves. There is nothing to manufacture or deliver.

    You're dead on, this is just him hoping he can fool people into thinking they still even need his factories at full capacity. Pretty sure they don't.

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  • [–] 38 points 9 months ago (15 children)

    This. They'll shut down for retooling, open up to churn out a small number of robots that do nothing, and claim success while firing most of the staff.

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  • [–] 18 points 9 months ago* (14 children)

    Well the contract he signed for ~$1 trillion by 2035 specifies he has to deploy 1 million robots and 1 million robo-taxis. Which I can see happening.

    The issue I see with it is he has to get Tesla car deliveries up to 20 million a year. To put that into perspective, new car sales in the U.S. has never hit 20 million vehicles that I know of. Globally I just saw their sales were at less than 2 million.

    So chopping the $80,000+ models and keeping the ~$40,000 models that make up 97% of their sales makes sense. He needs something that will gather a lot of new sales, and there aren't mass amounts of people with $100k to buy a new car.

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  • [–] 19 points 9 months ago (13 children)

    My bet is on him selling cars to himself somehow

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  • [–] 27 points 9 months ago (8 children)

    Nah, he'll have the government buy them as fleet cars.

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  • [–] 20 points 9 months ago (7 children)

    SpaceX are 'buying' all the Cyber Trucks no-one wants.

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  • [–] 12 points 9 months ago (6 children)

    Weren't local police departments looking at the cyber truck, ran trials, and said lol, no thanks

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  • [–] 7 points 9 months ago (5 children)

    At least they ran trials. I feel the federal gov't would just buy the shit with our taxes.

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  • [–] 3 points 9 months ago (4 children)

    The federal government is essentially buying them up when space x does it. Since that’s where space x gets most of its money.

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  • [–] 1 point 9 months ago (3 children)

    That's like saying your employer is buying your car because you get paid by your employer so your company is bankrolling Ford or whatever.

    SpaceX bids on services the government wants people to provide, they win the bid (usually lowest cost due to their reusable rockets) and deliver said product/outcome. They don't even operate on cost plus contracts like other space companies, it's generally fixed cost.

    This isn't like Tesla where there's things like ZEV credits or $7500 federal rebates.

    This is I want to buy something and SpaceX delivers it, and of what they get from the government, that is the vast vast majority of it.

    Also Starlink is now their biggest revenue generator (of which their are government purchases as well)

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  • [–] 1 point 9 months ago* (2 children)

    SpaceX also gets subsidies and tax credits. That’s different from contracts, and it’s our money. It they need credits and subsidies, they sure as fuck don’t need a parking lots full of unused and unsellable cyber trucks.

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  • [–] 1 point 9 months ago

    Looks like I was outdated on the subsidy side.

    https://arstechnica.com/tech-policy/2026/01/starlink-demands-grant-money-from-states-even-when-residents-dont-buy-service/

    While that almost 1 billion grant did get cancelled, it looks like they actually did get another grant, but haven't received the money yet. That's for $733.5 million to provide subsidized services to 472,000 locations.

    It sounds like SpaceX is trying to put requirements on the states though if they accept it, so we'll see if this goes through or not.

    If it does though, this would be the government giving them a lot of money.

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  • [–] 1 point 9 months ago* (last edited 9 months ago)

    Every business gets tax credits, and tax credits are not government money being paid to SpaceX. It just means they pay less taxes. You as a individual get them too. That's money the government never had. For businesses its also usually somethings like if you build your business here you don't pay property taxes for X years. It wasn't anything like the EV rebate which was designed to prop up an industry.

    They have received very little money that isn't for services delivered. It's not 0, but it's very little.

    One could have argued they almost got a billion dollars for the rural broadband grant but that was revoked and they never got it. That would have been a we'll give you money to help launch rockets and lower your prices for our residents, had it happened.

    Edit: there's very little reason to be upset with SpaceX in something like this. They've saved the government billions and billions of dollars by existing now. Tesla sure, they were given a lot of money for nothing in return, or programs were designed that forced other companies to give them money, but you're barking up the wrong tree with SpaceX.

    Edit: This website says they received 6 grants, some training reimbursements, and some loans which probably had good repayment terms. https://subsidytracker.goodjobsfirst.org/parent/space-exploration-technologies-spacex And while some of those are undisclosed, it's not like McLennan County is giving them a billion dollars.

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  • [–] 4 points 9 months ago (2 children)

    Good point ($1 million x $100,000 for cars)+($1 million x 500,000 for robots) is still less than a trillion $.
    No?

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  • [–] 1 point 9 months ago* (1 child)

    His pay schedule amounted to $1trillion, not that he was going to make Tesla 1trillion.

    It’s all to pump up his compensation

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  • [–] 1 point 9 months ago

    My maths must be wrong but my point was:
    It appears that his pay schedule is so high that he could simply buy the cars/robots required to meet his performance targets.
    Maybe I'm not making sense because none of this makes sense.

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  • [–] 9 points 9 months ago* (last edited 9 months ago) (15 children)

    The S and X haven't really sold well since the model 3/y were ramped up. Those ate most of their sales. Even before the nazi shit they were low, and he's hinted a couple times before that as well that their days were numbered.

    They did want a car to put fancy tech in like the plaid version, but that'll just be the roadster now instead.

    They are leaving a big gap in the lineup though without a bigger SUV, so it'll be interesting to see if they bring the extended Y from China to other markets now.

    Edit: actually it was just after the salute before it's impact would have been apparent in Feb. They mentioned there was some nostalgia around them even though they weren't selling a lot, but at the same time said they weren't going to cancel them... so that didn't age well.

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  • [–] 4 points 9 months ago (11 children)

    I don't think them discontinuing old models is a problem. The problem is that they were supposed to announce new models years ago. No they are closing factories and not only still didn't announce anything, they are switching to robots. So no new models are coming. It's a disaster. Looks like Musk took charge at the company, forced everyone to work on Cybertruck, this failed and now they don't know what to do.

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  • [–] 1 point 9 months ago* (10 children)

    They've clearly stated they canceled the newer model in place for the cybercab so ya. Unless that fails and they have to pivot back to cars with steering wheels I think the roadster / semi will be the last new human drivable ones?

    It's not the same company it used to be anymore that's for sure.

    Edit: Maybe the 3/y will get 1 last human refresh too?

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  • [–] 2 points 9 months ago (9 children)

    I think that they were isolating Elon from real decision making for a long time but he finally took over and forced them to create the Cybertruck. To me it's not even clear if they are still able to design cars or if Elon completely destroyed their ability to function as a car maker. Shareholders apparently still believe they can create new products but we have seen any evidence of that in years.

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  • [–] 1 point 9 months ago* (8 children)

    I mean, the Cybecab exists and is driving on public roads today with a driver for testing purposes, and without a driver on private roads. It might be a bit far to say suggest they can't design a car.

    The question isn't can they make a car, but is that car ever going to be allowed to legally drive on public roads as designed without a driver.

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  • [–] 1 point 9 months ago (3 children)

    No, the question is why does anyone give a fuck about robotic taxis at all? Waymo has been at if far longer, for real, and they are still losing money. There is no business model.

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  • [–] 1 point 9 months ago* (2 children)

    That's a pretty wild and closed mind thinking to say there's no business model for it.

    I'm not saying Tesla can truly solve this problem, but lets just assume for the moment that they actually can solve self driving.

    Note: For anyone who questions this thesis, just to pre-empt people replying "but they can't do it", that is NOT what this discussion is going to be about, so get lost.

    Now that that is out of the way

    Waymo vehicles are retrofitted vehicles that are expensive to begin with, with more expensive hardware. The car itself is 70k+ and with retrofits its well over 100k. Jaguar and their suppliers have to earn a profit on the vehicle, and then Waymo has to pay on top of that to get it all customized. (edit: and pay for service which comes at a profit for the supplier as well)

    Tesla has designed a bespoke vehicle specifically for autonomous driving that is going to cost them less than 30k to build at scale including all the hardware, no retrofits needed. Everything from it's construction, interior, 2 seats vs 4 seats etc are all designed for this one exact purpose. They don't even have a steering wheel or pedals, and while the video could just be a gimmick, they've showcased a robot that is specifically designed to be able to clean this specific interior.

    Tesla can refine their own lithium hydroxide, to build their own batteries, which they claim (no proof) are cheaper than their supplier batteries for cost/kwh. That's not to say they could sell them for more profit than Samsung or LG or BYD, but that those companies put a profit ontop of their cells, and Tesla claims the cost is below that.

    So, they refine their own lithium now, could already make batteries cheaper than they could buy them from others before that, they build their own cars where they don't need to make a profit on the sale, which has been explicitly designed for this one use case and you still don't think there's any room for it to be profitable, IF they can actually solve the problem?

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  • [–] 1 point 9 months ago (1 child)

    Checker Motors doesn't rule the world.

    Making taxi cars is not profitable.

    The corporate model is financially unviable because the capital owners rather than the drivers are taking all the risk.

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  • [–] 1 point 9 months ago* (last edited 9 months ago)

    You are correct that Tesla takes on the risk, and that risk is immense, but that doesn't mean it can't be profitable.

    Keeping capital expenditures to build the CyberCab line separate for a moment.

    The cars are going to cost Tesla somewhere in the 20k-30k range to build with 0 profit. We know it'll be cheaper to build at scale than a Model 3 which they can sell for a profit at 37k USD so lets just say 30k.

    The average Lyft/Uber rides are somewhere between $15-$20, so given no driver, lets say the average autonomous ride at scale, is $10. Waymo's is currently almost $20, but scale is small so that should come down.

    That's 3000 rides to make up the base cost of the car, which means it's 8.22 rides a day for a year to cover the capital costs of the car, and Uber drivers typically do 15-30 rides a day, so the car could pay for itself in 100-200 days at $10 average rides.

    Beyond that, you need to cover all the additional costs like charging (they own the infrastructure so its industrial rate cost), service, operations management (e.g if a car gets stuck who goes to retrieve it in person like Waymo does), customer support etc etc.

    So if we say 30 rides a day because it can run 24/7, that's $300 a day per car in revenue to cover all the extra costs after the car is paid off in 100 days and start paying off the production lines.

    That seems doable to me, and this is probably pretty conservative (edit on ride count per day per car.)

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  • [–] 1 point 9 months ago (1 child)

    It's still under development and it's hard to tell what it will do when it hits the roads. What if it's total disaster like Cybertrack? They don't just have to design cars. They have to design cars that people want to buy.

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