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Tesla’s Cybercab, Optimus Output to Start ‘Agonizingly Slow,’ Ramp Up Later, Musk Says

Tesla chief executive Elon Musk said early production of the company’s Cybercab robotaxi and Optimus humanoid robot will be “agonizingly slow” before accelerating significantly as manufacturing matures.

Responding to a post on X, Musk said production speed depends heavily on complexity, noting that output is inversely proportional to the number of new parts and manufacturing steps involved. Because both Cybercab and Optimus rely on largely new designs and processes, early volumes will be limited before scaling rapidly.

Tesla has said it aims to begin volume production of the two-seat Cybercab, which lacks manual controls such as a steering wheel or pedals, in 2026. Output of the Optimus robot is expected to begin toward the end of that year. In December, Musk said Tesla was already testing robotaxis without safety monitors in the front passenger seat.

Much of Tesla’s $1.39 trillion valuation is tied to expectations for self-driving technology and robotics, even as electric vehicles remain the company’s primary source of revenue. Musk has repeatedly described humanoid robots as central to Tesla’s long-term strategy, arguing they could eventually surpass its vehicle business in economic impact.

Self-Driving Technology and AI Take Center Stage at CES as Automakers Pull Back on EV Plans

Autonomous driving technology and artificial intelligence are expected to dominate this year’s CES trade show in Las Vegas, as automakers and investors look beyond electric vehicles for growth amid rising costs, safety concerns, and regulatory pressure.

With many carmakers scaling back electric vehicle strategies, suppliers and startups are using CES to showcase advances in self-driving hardware and software. Industry observers expect a wave of partnerships and announcements focused on reducing driver involvement — or eliminating the human driver altogether.

“This year you will see more and more focus on AI and autonomous,” said C.J. Finn, U.S. automotive industry leader at PwC, adding that the industry’s ability to deploy driverless technology safely will be closely scrutinized. He noted that connectivity and AI-driven autonomy will be “front and center” at the event.

AI is also spreading well beyond vehicles, with applications ranging from robotics and wearable devices to smart home systems and healthcare technology. Among the headline speakers at CES are Jensen Huang of Nvidia and Lisa Su of Advanced Micro Devices.

CES 2026 runs from January 6 to 9 and has in recent years become a major platform for automakers to debut new EVs. This year, however, the show will feature far fewer electric vehicle launches. A rollback of EV-friendly incentives under the Trump administration — including the removal of a $7,500 tax credit — has cooled consumer demand and forced automakers to rethink their strategies. As a result, most major manufacturers are not planning new EV unveilings at CES, marking a sharp shift from previous editions.

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Despite years of heavy investment, commercializing autonomous vehicles has proven difficult. Regulatory hurdles, high development costs, and investigations following crashes have pushed several companies out of the market. Still, momentum has returned following Tesla’s limited robotaxi rollout in Austin and the continued expansion of Waymo, owned by Alphabet.

Advanced driver-assistance systems have also improved, with hands-free highway driving and automated lane changes becoming more common. Automakers such as Rivian are aiming to introduce “eyes-off” driving features and autonomous operation on city streets.

At the same time, cost pressures remain a major concern. Automakers are reassessing capital spending after absorbing billions of dollars in EV-related write-downs and grappling with tariffs on imported vehicles and parts. Many have chosen to absorb tariff costs rather than pass them on to consumers, squeezing profit margins.

“The main theme we expect to see emerging at CES is cost and cost competitiveness,” said Felix Stellmaszek, global automotive and mobility leader at Boston Consulting Group, noting that competition from Chinese automakers is also weighing on industry strategies.

L&F Cuts Value of Tesla Battery Materials Deal as 4680 Plans Falter

South Korean battery materials maker L&F said on Monday that the value of its battery material supply agreement with Tesla has been sharply reduced, falling to just $7,386 from an earlier estimate of $2.9 billion. The company did not disclose the specific reasons behind the dramatic revision.

L&F announced in 2023 that it had signed a deal to supply high-nickel cathode materials to Tesla and its affiliates from January 2024 through December 2025. Industry sources and analysts previously said the agreement was intended to support Tesla’s in-house battery production, particularly its next-generation 4680 cells.

Tesla CEO Elon Musk unveiled the 4680 battery plan in 2020, describing it as a breakthrough technology that would lower costs and enable the production of a fully autonomous electric vehicle priced around $25,000. However, progress has been slower than initially projected. As global demand for electric vehicles weakened and Tesla struggled to scale up production of the 4680 cells, the company required far less cathode material than originally expected, analysts said.

Tesla currently uses the 4680 batteries primarily in its Cybertruck, a model that has underperformed sales expectations despite Musk’s earlier forecasts of hundreds of thousands of units annually. Musk has also acknowledged that scaling up Tesla’s new dry electrode battery manufacturing process remains a significant technical challenge.

Market analysts link L&F’s reduced deal value to broader headwinds across the battery and EV sectors. Cho Hyun-ryul, a senior analyst at Samsung Securities, said issues with production yields for the 4680 batteries, combined with slowing EV demand growth, likely contributed to Tesla cutting back orders. He added that uncertainty is spreading across the battery industry as a whole.

The pressure is not limited to L&F. Several battery suppliers have reported order cancellations and the scaling back of joint ventures with major automakers such as General Motors and Ford Motor following the end of U.S. federal EV subsidies in September. South Korea’s battery sector has been particularly affected as automakers reassess electric vehicle strategies amid policy uncertainty and weakening demand.