Back in 2021, Elon Musk announced their next big product Optimus, also known as Tesla Bot, which is a conceptual general-purpose robotic humanoid under development. It was announced at the company’s Artificial Intelligence (AI) Day event on August 19, 2021. CEO Elon Musk claimed during the event that Tesla would build a prototype by 2022. Musk is on record, having said that he thinks Optimus “has the potential to be more significant than the vehicle business over time. At that event, Musk brought on stage a guy in a suit, which initially gave the audience the impression that the Bot was already built, only to reveal it really was a guy in a suit, but that set an expectation in people’s minds that Tesla could do it and that is what the new Bot will look like once in production. Musk also claimed that Bots would sell for $20,000 each, quite the target for such a revolutionary product that has not yet been achieved by many other companies who have been playing in this space for decades, including Sony and Boston Dynamics.
Fast Forward a year to the 2022 AI Day presentation
At the start of Tesla’s 2022 AI Day presentation, Musk acknowledged that they had “a guy in a suit” last year but promised something much more impressive today. Once again, the audience watched in anticipation of the new Bot about to be displayed. But unfortunately, disappointment soon set in. The Bot walked onto the stage in an awkward manner and, in slow motion, did a bit of a jig, and some hand waving occurred, but that was about it. According to Musk, this prototype can do more than what was shown live, but “the first time it operated without a tether was tonight on stage.” Musk did predict on stage that it could hit a price of “probably less than $20,000” and later, in a Q&A session, explained that Tesla is very good at building the AI part of the Bots. But clearly, from the motion of the Robot on stage, they have a lot of work to do on the actuators necessary for robots to move like humans. He claimed that the difference between Tesla’s design and other “very impressive humanoid robot demonstrations” is that Tesla’s Optimus is made for mass production in the “millions” of units and to be very capable. As he said that, a team of workers moved a non-walking prototype offstage behind him.
Are Actuators going to be Tesla’s Achilles heel?
You can argue that a Robot is nothing more than a PC with moving parts. Those moving parts in the case of Robotics are a mix of Linear Actuators and Rotary Actuators. These actuators are used in place of muscles, which humans have developed over millions of years and are the only feature in the human body that allows us to make any sort of movement. Tesla claims its Bot will require 28 Actuators in total, whereas the human body has about 600 muscles. So clearly, with so few actuators, the Bot will not be able to perform anything like a human. The problem with these Actuators is that they are quite complex devices, which brings us to FIRGELLI® Automation Inc., a privately held company that’s been around for over 20 years that designs and manufactures Actuators for every application that requires motion, according to the Founder and CEO Robbie Dickson. It is going to take Tesla many years to learn everything about the Actuator business, so it makes sense that a company that has been playing in this space for 2 decades be acquired by Tesla so they can fast track their knowledge and high-volume production scale, necessary for mass production at Musk’s price target of “under $20,000”. According to FIRGELLI®, Tesla has already been purchasing Actuators from them for many years but would not comment on the purpose for those purchases, but we can only assume there is some sort of collaboration effort already underway.
Will Tesla Acquire FIRGELLI®?
There has been no comment on this by either side. However, we know that Tesla has made 8 acquisitions and 2 investments. The company has spent over $2.95B on the acquisitions. Tesla has invested in multiple sectors, such as Energy Storage Tech, Autonomous Vehicles, Electric Vehicles, and more. The new move to Humanoid Robotics is going to take a fair bit of time and investment to get into mass production, as it did for the car business. We expect to see more acquisitions going forward relating to this space, so could FIRGELLI be the first one to drop? As for Valuations for FIRGELLI, it’s hard to value private companies like this, whose financials are kept private. What we do know is that the Actuator market was over $30b as of 2020, and FIRGELLI seems to be one of the largest players in this market. Even if they only have 1% of the actuator market globally, that would put them at a $3b market cap, meaning it would be one of Tesla’s largest acquisitions to date, but If they want to achieve such strict targets, Tesla needs to step up its game plan.
