Elon Musk’s ambitious ventures continue to capture headlines, this time with a bold claim made by Morgan Stanley’s Adam Jonas. According to Jonas, Tesla could potentially save $2.5 billion by replacing 10% of its workforce with humanoid robots, particularly the Optimus model. 
While the idea of humanoid robots may sound far-fetched, Tesla’s strategy is one that’s rooted in Musk’s long-standing goal of revolutionizing the workforce.
Jonas, a well-known Tesla bull, is one of the few financial analysts still optimistic about the company’s future despite the numerous challenges it faces. This includes Musk’s deepening involvement in politics, the evaporation of federal EV credits, and the eventual end of zero-emission vehicle (ZEV) regulatory credits. As these factors weigh heavily on Tesla, Jonas finds a sliver of optimism by highlighting Tesla’s potential cost savings through automation.
While the concept of replacing human workers with robots isn’t new, Jonas’s suggestion is based on an intriguing economic calculation. He suggests that with a 10% reduction in Tesla’s current workforce of 125,665 employees, Tesla could save a significant amount-$2.5 billion. This is thanks to the Optimus humanoid robots, each of which reportedly has a net present value (NPV) of $200,000. But this bold move also raises questions about the long-term impact on jobs, particularly in the face of automation. Jonas also touches on the decline in demand for ZEV credits, an important source of income for Tesla in recent years.
The question remains, however: will the widespread use of robots like Optimus create more harm than good? There is growing concern about automation leading to job losses, particularly in countries with insufficient social safety nets. Without the infrastructure to retrain workers for new opportunities, automation could exacerbate wealth inequality. Despite these concerns, Jonas seems confident that Musk’s strategy is a calculated risk with long-term benefits.
At the same time, Tesla’s energy business faces challenges as well, with energy storage deployments remaining stagnant. Federal tax credits for EVs and solar are set to expire by the end of 2025, putting further pressure on Tesla’s bottom line. The end of these credits, along with the removal of penalties for failing to meet Corporate Average Fuel Economy (CAFE) standards, has the potential to dramatically affect Tesla’s financial standing. Still, Tesla’s EU operations will likely continue to benefit from ZEV credits, offering some relief from the domestic challenges.
In conclusion, while Tesla is in the midst of a storm, its future remains unpredictable. The company’s ability to innovate, cut costs, and diversify its revenue streams will determine whether Musk’s controversial vision of automation becomes a reality.