Tesla Inc. (NASDAQ: TSLA) is auditing key suppliers in China as it prepares to scale production of the Optimus humanoid robot, according to a report by The Paper on Monday.

The audits involve major component manufacturers including Tuopu Group, Sanhua Intelligent Control, and Joyson Electronics. These firms supply critical parts such as actuators and joint modules for the robot.

Supply Chain Verification

Sources familiar with the matter told The Paper that these companies had already received orders for Optimus before the audits commenced. The process is designed to ensure compliance and quality standards are met prior to mass manufacturing.

Tesla did not immediately respond to requests for comment regarding the supplier audits or production timeline.

Production Goals and Facility Changes

Elon Musk has previously stated Tesla aims to produce 1 million Optimus units annually at scale. To facilitate this, the company has halted production of premium Model S and Model X vehicles at its Fremont, California facility to repurpose the space for Optimus assembly.

Lars Moravy, VP of Vehicle Engineering at Tesla, confirmed that the Fremont plant will host at least 40 distinct production lines for the robot. This complex setup reflects the intricate design and architecture of the humanoid machine.

Musk has also described Optimus as potentially becoming the world’s first Von Neumann machine, a theoretical self-replicating system capable of using available resources to reproduce itself.

Market Reaction

Shares of Tesla rose 1.39% to $369.34 during pre-market trading on Monday following the reports.

According to Benzinga Edge Rankings, Tesla scores moderately on Growth and Quality metrics but shows poor Value and Momentum. The stock also lacks a favorable price trend in medium and long-term outlooks.

Tesla Inc. (NASDAQ: TSLA) AI chief Ashok Elluswamy warned that ensuring safety for physical robots presents a significantly greater challenge than safeguarding large language models. He clarified that recent viral videos showing the company's humanoid robot performing combat moves were essentially remote-controlled.

Elluswamy Warns Physical AI Raises Stakes

Elluswamy stated on X that the robot blindly performed the moves while maintaining balance. He emphasized that AI safety for physical robots makes current large-model safeguards look like child's play. Elon Musk responded to the post with a "100" emoji, signaling agreement.

The distinction between teleoperation and autonomy is critical for Tesla's development roadmap. While teleoperation can produce impressive motion, the robot does not decide actions independently. Tesla describes its end goal for Optimus as a general-purpose, bipedal, autonomous humanoid robot capable of handling balance, navigation, perception, and interaction with the physical world.

Teleoperation Still Falls Short Of Autonomy

Musk previously highlighted this gap during Tesla's second-quarter earnings call. He noted that many impressive humanoid demonstrations online are pre-programmed or remote-controlled. No humanoid robot can yet perform generalized tasks on command without programming. The Q2 discussion underscored the challenge of turning Optimus into a genuinely general-purpose machine.

This limitation extends across the broader industry. Reuters reported that Chinese robots have demonstrated kung-fu-style moves but still struggle with dexterity and reliable autonomous factory work. The International Federation of Robotics stated that about 7,000 humanoids were sold globally in 2025. Most units are used for research and AI-data collection rather than productive commercial work.

Tesla Pushes Optimus Toward Commercial Scale

Despite these technical hurdles, Tesla is scaling its investment in the program. Elluswamy took responsibility for Optimus after program chief Milan Kovac left in June 2025. Tesla subsequently installed its first-generation Optimus production line in Fremont.

Elluswamy acknowledged that Optimus has "big shoes to fill." Musk cautioned that initial production will be "extremely slow," distinguishing the manufacturing process from standard car production. TSLA shares grew 1.63% to $370.20 during pre-market trading on Monday.

What the Numbers Show

The disparity between global sales volume and commercial utility highlights the sector's early-stage dependency on data collection. With only about 7,000 units sold globally in 2025, primarily for research, the market remains focused on generating training data rather than deploying autonomous labor. This suggests that near-term revenue from Optimus will likely be minimal compared to the capital expenditure required for scaling production lines like the one in Fremont.