Tesla (NYSE: TSLA) and its CEO, Elon Musk, can seldom escape from their various controversies. On October 10, Tesla held its long-awaited “We, Robot” day where the company unveiled its highly anticipated robotaxi. Additionally, it showcased the progress it has made with its Optimus humanoid robots and teased a big vehicle named Cybervan which can carry up to 20 people.

These announcements failed to impress markets and the stock fell sharply on October 11. However, while the lack of specific timelines for these futuristic products came in as a dampener, analysts were generally impressed by Optimus.

Tesla Showcased Its Optimus Humanoid at the “We, Robot” Day

Musk said that the humanoid – which would cost somewhere between $20,000-$30,000 – can “be a teacher, babysit your kids, walk your dog, mow your lawn, get the groceries…Whatever you can think of it will do.”

Gene Munster, managing partner Deepwater Asset Manager was quite upbeat on Optimus and said, “After spending time with the Optimus bots at the event, it was clear that the project is more advanced than I expected.”

While Munster found the bot’s movements as slow and said it felt more like a robot than a humanoid, he said, “They interacted with the crowd, exhibited smooth hand and neck movements, and displayed a human-like personality with jokes.”

There is little denying that the event – which was originally meant only as a robotaxi day – turned out to be mostly about Optimus. The humanoid interacted with the visitors and also poured beer for the guests.

While the product seems quite futuristic and better than competing products, there was a catch – the capabilities that Optimus showcased were not entirely artificial intelligence (AI)-powered but the humanoids were being remotely controlled.

Optimus Was Not Fully AI In Action

Tech evangelist Robert Scoble explored whether Optimus was being totally powered by AI but found that wasn’t the case. He probed the humanoid with the question, “how much of you is AI?”

The machine scrambled for an answer and replied, “I can’t disclose just how much. That’s something you’ll have to find out later.” On being probed whether at least “some” of it was AI, Optimus replied, “I would say, it might be some. I’m not going to confirm, but it might be some.”

“This is not wholly AI. A human is remote assisting,” tweeted Scoble along with a video of Optimus.

Lux Capital co-founder Josh Wolfe said that while it was “Totally worthy to celebrate low latency remote control,” but it was “totally dishonest to demo these as autonomous robots—call it the parlor trick it is.”

Notably, Tesla or Musk did not make it clear upfront (or at all) that Optimus was being assisted by humans, let alone that it was mostly controlled by humans. The billionaire – who seldom shies away from exaggerations and flamboyant claims – believes that Tesla can sell millions of these annually. He has also said that Tesla can generate annual earnings of over $1 trillion from Optimus and it can add $25 trillion to Tesla’s market cap, though these claims are extremely doubtful.

At the “We, Robot” event Musk predicted, “This will be the biggest product ever—of any kind” – an assertion he has made in the past also.

Musk Has Made Flamboyant Claims About Tesla FSD In The Past

To be sure, this wasn’t the first time that Musk and Tesla have stretched the truth. During Tesla’s Q4 2022 earnings call, Musk said that he does not see any company which is even a “distant second” to Tesla in self-driving. He added, “I don’t think you could see a second place with a telescope, at least we can’t.”

Since 2014, Musk has been talking about Tesla cars getting fully autonomous, and the timeline was once within 2020. Over the years, Musk has said on multiple occasions that Tesla is close to full autonomy.

Most recently, in 2023 Musk said that he was confident that Tesla cars would become fully autonomous by the end of the year. However, that wasn’t the case, and the company’s full self-driving (FSD) – a misnomer as the software is not L4 autonomous– is still nowhere close to full autonomy.

Meanwhile, at the “We, Robot” Day, Tesla finally unveiled its Robotaxi which has been rechristened the “Cybercab.” The vehicle would have no steering wheels and pedals and would “probably” be in production in 2026.

For context, in 2019, Musk talked about the possibility of a million robotaxis by 2020. While we can give the company some benefit of the doubt due to the COVID-19 pandemic, there was no way that Telsa could have done that in such a short time and Musk must have known that. We are still many years away from those million robotaxis – if at all the milestone would ever be achieved.

Musk’s Exaggerations Are Nothing New

While Musk has said that the two-seater Cybercab would cost less than $30,000 there are reasons to be apprehensive about the pricing. Notably, when Musk unveiled the Cybertruck pickup in 2019, he said that the model would start at less than $40,000. However, after Tesla halted the sales of the cheapest version of Cybertruck – which was initially priced above $60,000 – the model now starts at over $80,000, or over twice the price that Musk promised.

As for the FSD, Musk said that the software would eventually cost $100,000. However, while Tesla raised FSD’s price by $5,000 to $15,000, it has since cut the price to $8,000. While the company has attributed the price cut as a measure to boost adoption, it seems like the real problem is that the feature sold poorly at $15,000.

In 2021, Musk expressed confidence that the company’s deliveries would rise at a CAGR of 50% over the long term. The company has since stopped talking about that goal after missing it for two years. As for 2024, the question is not whether Tesla’s deliveries would rise by 50% or whether they would grow at all as the shipments are down YoY in the first nine months of the year.

While usually Musk has gotten away with his exaggerated claims, he got into regulatory crosshairs over his infamous “taking Tesla private” tweet.

Musk Got Into Trouble With His “Taking Tesla Private” Tweet in 2018

For the uninitiated, in 2018, Musk tweeted that he was considering taking Tesla private at $420 per share and that he had also “secured funding” for the deal. Note that that price is not comparable to the current price as the company has split its shares twice since then.

Musk said that he secured the funding with the help of Saudi Arabia, but he was wrong. Eventually, in the same year, Saudi Arabia’s PIF (public investment fund) invested in Lucid Motors, an EV (electric vehicle) startup run by former Tesla employee Peter Rawlinson. Interestingly, Saudi Arabia actually helped Musk buy Twitter a few years later.

After that controversial tweet, Musk paid a $20 million fine to the SEC and agreed to step down as the company’s chairman. Tesla too paid a fine of a similar quantum. Musk also agreed to step down as Tesla’s chairman but continued to stay as the CEO.

As part of the agreement, Musk was also supposed to be careful about tweeting price-sensitive information, and his tweets were supposed to be vetted by the company’s lawyers. Judging by his recent Tweets, it seems doubtful that a lawyer is vetting them.

Did Musk Lie About the Capabilities of Optimus?

While Musk and Tesla might not have directly lied about the capabilities of Optimus – they were not being honest by not disclosing that the humanoid was being assisted remotely by a human. If the SEC determines that Tesla was trying to deceive investors, consumers, and shareholders, like Nikola’s faked EV truck ad, there could be severe consequences for the company and Musk.

It remains to be seen whether any action is taken against Tesla and Musk but it does no good to its reputation as it has been criticized for a “fake it till you make it” approach in the past as well.

Even with Optimus, a previous video showed the humanoid folding a shirt. However, just about half an hour later Musk tweeted, “Optimus cannot yet do this autonomously, but certainly will be able to do this fully autonomously and in an arbitrary environment.”

While Tesla and Musk are building some of the most futuristic products of our times, such exaggerated claims only hurt the brand and its credibility.