Investing.com — As artificial intelligence moves from digital interfaces to physical applications, Tesla Inc (NASDAQ: ) is eyeing a rapidly expanding frontier, embodied AI.
Morgan Stanley (NYSE: ) analyst said the buzz around Tesla is less about electric vehicles and more about its innovations in robotics and artificial intelligence. While concerns about market headwinds in the electric vehicle market, including competitive pressure from China and potential margin compression, loom large, the focus is shifting to Tesla’s progress in fully self-driving (FSD), robotaxi milestones and humanoid robots like Optimus.
Morgan Stanley noted that Tesla’s humanoid robot, Optimus, could become one of Tesla’s most valuable ventures, despite its absence from current valuation models.
Analysts see this as a broader trend within the “embodied artificial intelligence” space, which encompasses machines capable of navigating and interacting with the physical world — ranging from drones and autonomous vehicles to humanoid robots.
Although key components such as actuators, sensors, rare earth magnets and energy storage systems are often sourced from global suppliers, including many in China. As the adoption of embodied artificial intelligence grows, supply chain security and resilience become key concerns.
Tesla’s integration of hardware and AI capabilities gives it a potential advantage in solving the supply chain bottlenecks and manufacturing challenges plaguing the robotics industry. Analysts suggest that Tesla’s expertise in vertical integration and its ties to SpaceX and xAI, the company founded by CEO Elon Musk, could position it as a leader in this domain.
What’s more, Musk’s influence on the political debate surrounding autonomous vehicles could speed up regulatory frameworks, enabling faster adoption of AI-powered technologies like robotaxis.
Tesla’s embodied artificial intelligence ventures could redefine its growth trajectory. Analysts are revising the models to include potential revenue streams from AI-powered industries, including autonomous ride-sharing and intelligent robotics.
“Tesla’s role in helping to ‘fill the gap’ of next-generation manufacturing and supply chain will be an increasingly significant driver of growth and shareholder value, in our view,” Morgan Stanley analysts said.
While Tesla remains synonymous with electric vehicles, its AI ambitions could signal a new chapter for the company, one where robots, not cars, take center stage.
