Why is Elon Musk Making Robots

Elon Musk’s Tesla Bot is the latest announcement in the Tesla product lineup. It’s a humanoid robot geared to repetitive, tedious, dangerous, and menial tasks. Elon wants to use this Bot in his factories and intends to sell it as a home assistant. 

There are various reasons why Elon Musk is making this Robot. According to Elon Musk, the primary reasons are:

  • Upcoming population collapse.
  • Labor shortage.
  • Improving the Tesla profit margin.
  • Expanding the self-driving software usage in real life.

Population collapse & Labor Shortage

Some people believe that this earth has too many people and harms the environment. For example, Bill Gates thinks that various countries need to lower the birth rate. Otherwise, worldwide social, economic, and environmental disaster is incoming. 

On the contrary, Elon Musk believes that this earth has a far lower population than its capacity. We need far more population to advance human civilization. According to Elon, population collapse would be devastating as the birth rate slows down.

Musk predicts that getting a skilled labor force will be tough and challenging as the human population shrinks in the coming decades. It will devastate various industries where human labor is crucial. It’s why Elon Musk is making the humanoid Robots to keep his factories running, help other companies, and help people in their homes.

Elon Musk always thinks ahead of the problem. According to his admission, he didn’t create Tesla to save the environment. But he started the EV car company because of the fear that we don’t have unlimited oil and gas energy to support human civilization in the coming decades. Similarly, he is making robots because he is fearful that the birthrate isn’t enough to replace the aging population, which will put pressure on the labor force.

Extension of Tesla FSD

The Full Self Driving (FSD) is the flagship software that Tesla is currently working on. Tesla’s approach to solving self-driving cars is entirely different from other companies. Most companies use expensive LiDAR, precision Maps, precision GPS, and Cameras, whereas Tesla solely relies on Cameras.

Tesla is trying to mimic human vision, intelligence, and driving behavior. Their primary argument is that the roads we see worldwide have been designed for humans. And humans drive using only the eye and brain. Thus, developing a self-driving system using only cameras and a powerful computer is possible.  

Elon Musk argues that Tesla needs to solve real-world AI to solve self-driving.

Many people underestimate how complex driving is. Even though many critics routinely say humans are terrible drivers, they gloss over that no one still couldn’t figure out the self-driving software. 

A human not only follows lines, signs, and traffic lights, but they also look at other drivers’ gestures, their vehicle speed, tire rotation, vehicle signal, hand signal, voice commands, road conditions, etc., to anticipate what the other driver is going to do. Moreover, a vehicle driver also anticipates the intention of pedestrians and cyclists and drives accordingly. Therefore, to solve self-driving, Tesla has to solve real-world AI. That’s what they are now trying.

SpaceX’s Starlink isn’t a new idea but a product that leverages SpaceX’s capability and expertise. Designing a satellite isn’t that complicated. Even university students develop cube satellites that can do amazing things. However, putting those satellites in orbit is the main challenge.

No other company on earth has reusable rockets except for SpaceX. Moreover, SpaceX’s rockets are the cheapest in the launch industry. Thus, SpaceX started the satellite internet business — Starlink — knowing that it could leverage its launch capabilities that other companies couldn’t.

Amazon is also trying to compete with Starlink with its Kuiper internet project. Even though they have successfully developed the satellites and ground terminals, Amazon doesn’t have a launch vehicle. They are relying on Blue Origin, Arianespace, and ULA rockets. This third-party rocket reliance will eat Amazon’s profit margin. 

Similarly, Tesla Robot is the general extension of the Full Self-Driving software. As they are trying to solve the real-world AI to mimic human vision and brain neural networks, it’s only logical to create another product that leverages current Tesla hardware and software.

Tesla already has its neural network chips, batteries, Dojo supercomputer, FSD software, and factories. Thus making a bot is easy. Moreover, if Tesla doesn’t make a real-world bot using this hardware, it’s nothing but a waste of resources.

Maximizing Gross Profit

Tesla directly employs more than 100,000 employees globally and indirectly employs half-million employees through subcontractors. Most of these employees work in the Tesla Giga factories, where they do repetitive, boring, and dangerous work.  

Elon Musk has wanted to make its production line more automatic and robotic for a long time but failed. However, he wants to accomplish it with the Tesla Robot.

An industrial employee works 8 hours a day, 5 days a week. Moreover, a worker gets sick, takes holidays, or gets injured. However, a Tesla Bot will work 24 hours, 7 days a week. There are no sick days or injuries. 

Elon Musk said in various interviews that the Tesla Robot would cost less than a car. Even if the Tesla Bot is priced at $80,000, a Robot is far more economical than hiring a factory employee. The Tesla bot will do 3x more work at a fraction of the cost. There’s no salary, pension, benefits, sick days, or labor union violations. 

Tesla has the highest gross margin per vehicle in the car industry. The use of Tesla Bot will increase the gross margin even higher. It’s why Elon Musk is making Robots.

New Product Line

Elon Musk’s every company has launched multiple product lines for revenue. SpaceX not only launches payloads to orbit and the International Space Station (ISS), but they also started the satellite internet business — Starlink.

Similarly, Tesla has numerous products besides its car business. Such as Solar Panels, Solar Roof, Energy Storage Solutions, Insurance, etc. The Robot is the new product line in the Tesla lineup.

Making a specialized robot isn’t a new idea. Many companies have been making bots for decades. However, no company has made these bots in mass volume for consumers. 

Boston Dynamics has been selling industrial Robots for a few years. However, these bots cost millions of dollars. Furthermore, the usability of these Robots is very limited. But Tesla wants to make a generalized Bot that can help human and business owners in day-to-day life.

Every year numerous companies showcase their specialized Robot. Some can cook food, make pizzas, fold shirts, or entertain people. But all these bots are useless because they are nothing but a gimmick. There’s no difference between these Bots and concept cars that automobile companies exhibit at auto shows.

Bottom Line

Elon Musk predicts that the humanoid robot business will be bigger than the car industry. He sees the prospects, and it’s why he is making the Tesla Robots.