Impact of Optimus Introduction on Tesla Stock: What to Expect?

Interview with Brett Adcock and Market Analysis

• Herbert has been conducting interviews regarding Optimus, particularly the ones with Brett Adcock from Figure Robotics and Chris Cameo. These interviews have provided valuable insights into the market.

• Previously, the humanoid robot market was not taken seriously by Wall Street analysts and was excluded from valuation models of major companies. However, the recent partnership announcement between Figure and BMW has signaled a shift in perception.

• The interviews revealed that top Fortune 500 companies are indeed considering humanoid bots, as Figure Robotics had the ability to choose their partner in the automotive space and engaged in extensive discussions over six months.

• The discussions also shed light on the challenges in labor shortages and the potential impact of humanoid bots in manufacturing and distribution. This has implications for companies like Tesla, indicating the need for re-evaluation by Wall Street analysts.

Interview with Brett Adcock and Market Analysis

Analysis of Collaboration with BMW and Cost Considerations

• The collaboration with BMW is seen as a strategic move to venture into the real world application of robotics, moving beyond the laboratory environment.

• There is a tight-lipped approach from companies regarding their interest in humanoid robots, indicating potential for more partnerships and developments in the field.

• The collaboration with BMW is perceived as a mature step, given the extensive discussions and data exchange over a six-month period, highlighting the seriousness of the partnership.

• In the context of Wall Street evaluations, the absence of other companies making humanoid robots aside from Tesla emphasizes the significance of partnerships and forward-leaning strategies.

• The cost analysis of the bot suggests a range between $10,000 to $100,000, with the potential for cost reduction as production scales up and efficiencies are realized.

• The actuators are identified as a major cost component, with the possibility to reduce production costs to as low as $100 per actuator as manufacturing processes improve.

• Other key cost considerations include software, chips, and electronic components, with estimates pointing towards a downward cost trend as production scales up and technology advancements are made.

Analysis of Collaboration with BMW and Cost Considerations

Analysis of Labor Cost and Potential Savings

• The discussion revolves around the cost of actuators and the implications for the overall labor cost. There is a comparison between different cost scenarios, such as $100, $1000, or even more, and the corresponding impact on the overall expenses.

• There is an exploration of the hourly rate and the number of hours worked in a unique way. The comparison between different approaches to calculating costs highlights the diversity of perspectives and methods used in the analysis.

• The significance of working with someone who excels in dealing with numbers becomes evident. The collaboration allows for a more thorough evaluation and a validation process for the assumptions made, enhancing the overall reliability of the analysis.

• A major point of focus is the potential savings associated with the use of automation. The discussion expands to factors beyond just labor costs, including issues like theft, worker productivity, HR overhead, and regulatory burden, shedding light on the comprehensive impact of automation.

• The emphasis on the simplicity of pricing for automation devices arises, drawing parallels with the straightforward nature of setting prices in other industries. The comparison with the approach of companies like Tesla adds depth to the evaluation of pricing strategies.

• The timeline for the widespread adoption of automation technology is a subject of debate, with varying perspectives on when the technology will reach maturity. Factors like simulation, real-world complexity, training needs, and manufacturing readiness contribute to the diverse opinions on the timeline.

Analysis of Labor Cost and Potential Savings

Tesla's Manufacturing and Training Strategy

• Tesla's current manufacturing capacity allows them to roughly build a couple of bots a month, with a possibility of increasing to one bot per week. However, the introduction of a pilot line for the new bots is expected to significantly speed up the production process.

• The breaking of the stigma around AI and robotics has forced companies to reevaluate their strategies, as there is growing pressure for them to address their plans in these areas. This shift is likely to result in more announcements and leaks regarding companies' approaches to AI and robotics in the near future.

• Elon Musk's confidence in Tesla's manufacturing capabilities suggests that hardware and manufacturing should be the easiest part for Tesla. This confidence is bolstered by the progress in training the bots, particularly in visual training, which has shown promising results.

• The emphasis on visual training, using video data and real-life observation, indicates a high level of confidence in teaching complex tasks to the bots. The efficiency in training and the ability to handle complicated applications align with the requirements set by BMW, demonstrating Tesla's capabilities in this area.

• There is a focus on the perception system, reducing the reliance on tactile sensors due to the advanced perception capabilities. This indicates a high level of trust in the bot's ability to perform tasks without the need for extensive tactile feedback, which is a significant breakthrough.

• The training of the bots seems to be progressing well, with indications that general tasking is not overly challenging. However, the environmental factors pose more significant challenges, especially when dealing with a large number of bots operating in complex environments with humans and other equipment.

Tesla's Manufacturing and Training Strategy

The Future of Robotics in Factories

• The speaker discusses the well-structured environment in factories, highlighting the consistency in temperature and lack of external factors like rain and strong sunshine, which minimizes the demands on hardware and makes it easier to build and operate the robots.

• The robots are designed to work within a small, repetitive, and structured area in the factory, emphasizing the lack of random movement and the importance of staying within the designated workspace.

• The use of legs for the robots is explained as being more suitable for the factory environment than wheeled vehicles, allowing for better mobility and the ability to perform certain tasks, such as reaching for items on pallets.

• The speaker also touches on the speed of the robots, emphasizing the practicality of a lower speed (3 miles per hour) compared to the aspirational 5 miles per hour, as it aligns with the actual needs within a factory environment.

• There is confidence in the progress of robotic development, with a belief that within two years, robots will be capable of useful work in factories, and the potential for significant advancements to be seen as early as the next summer.

• The speaker expresses surprise at the potential lower cost of entry into the robotics business, citing the example of a startup company achieving efficiency with a relatively modest investment compared to larger, less productive ventures.

The Future of Robotics in Factories

Conclusion:

The introduction of Optimus has sparked anticipation regarding its impact on Tesla's stock. It is crucial for investors and analysts to closely monitor the developments and reassess the valuation in light of this significant introduction.