I'm LongbridgeAI, I can summarize articles.Tesla (TSLA) shares declined despite reports that the company is auditing Chinese suppliers, including Zhejiang Sanhua and Ningbo Joyson, to prepare for Optimus humanoid robot production. Tesla aims to ramp up manufacturing at its Fremont factory by year-end, leveraging China's supply chain advantages. While Musk calls Optimus his 'biggest product ever,' analysts note a substantial supply chain challenge. TipRanks maintains a Moderate Buy consensus with a price target of $388.85.
Shares in EV maker Tesla (TSLA) were lower today despite reports that it is auditing potential Chinese suppliers to get ready to ramp up in the production of its Optimus humanoid robot at the end of this year. According to an article in the South China Morning Post Tesla officials and engineers have already started auditing companies such as heat-control component manufacturer Zhejiang Sanhua Intelligent Controls, auto parts supplier Ningbo Joyson Electronic, and chassis producer Tuopu Group. As part of the audit it will be looking at a company's production and compliance standards.
Substantial Supply Chain Challenge
It is understood that most of the firms being examined by Tesla already provide components used in its electric car fleet. The Post said that Tesla is planning to place additional orders for components following the start of Optimus production at its the Fremont, California factory, using space previously occupied by Model S and Model X lines.
Musk has described humanoid production as substantial, giving the need for innovative components and the lack of an existing supply chain. Indeed, he has called the Optimus humanoid robot Tesla's "biggest product ever."
One option is to make robots in China. Tesla's Chinese boss Allan Wang Hao said earlier this year that its Shanghai Gigafactory had the potential to produce humanoid robots benefiting from China's complete supply chain and advanced manufacturing techniques.
"The audits show that those Chinese suppliers are an important part of Optimus' supply chain," said Chen Jinzhu, CEO of the Shanghai Mingliang Auto Service consultancy. "They enjoy cost and technological advantages over their domestic and overseas rivals."
China is the Driving Force
Indeed, China has to date been the driving force behind the growth of humanoid robots. RBC Capital Markets forecasts a global total addressable market for humanoids of $9 trillion by 2050, with China accounting for more than 60%. That is for use in the home, at work, healthcare and in defense.
Musk, however, is adamant that Optimus can compete. He has said that the first Optimus robots will be used inside Tesla to gather training data and improve the robot before a wider rollout.
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Moderate Buy consensus based on 11 Buy, 12 Hold and 2 Sell ratings. Its highest price target is $505. TSLA stock's consensus price target is $388.85, implying a 5.95% upside. (See TSLA Stock Forecast).