Questions on the value of humanoid robots challenge those who follow robotics and AI. Ark Invest says the disruption to the labour market will be as large as the disruption to energy and the disruption to transportation from autonomous vehicles. AI underpins a number of these disruptions.
Cern Basher (https://x.com/CernBasher) takes a look at Tesla’s humanoid robot opportunity and calls it Boundless Optimus Transformation at Scale (“BOTS”) Model for Tesla.
Will probably be worth significantly more than the car side of things long-term. I think we might exceed a one-to-one ratio of humanoid robots to humans. It’s not even clear what an economy is at that point.Elon Musk, Investors Day 2023
Value from Humanoids Robots: Cern Basher Model
This model only considers the potential value of Tesla’s Optimus humanoid robot when made at scale. He qualifies this to say “potential” – as this isn’t a company valuation model and these are not predictions – the purpose is simply to show “what if”.
The BOTS model shows rather astounding what-if values – as every bot produced could add about $380,000 to Tesla’s market value. The market cap for 100 million bots is an additional $38 trillion.
- Tesla does not sell bots. The business mode is leasing
- Provides Tesla control over how people use them. Avoids someone building their own robot army!
- Lease costs are based on their capabilities, wear and tear, and risk of damage. The average monthly lease is $3,600.
- Assumed the bot works 16 hours per day, or an effective hourly “labor” cost of only $7.50.
- BOTS model excludes all other revenue from other Musk businesses
- Manufacturing costs are expected to be less than $15,000 and last ten years
- Annual maintenance and repair costs equal 12.5% or $1,875 per year, bringing the lifetime cost of each bot to $33,750.
- There is a ROBot tax of 33% of bot revenue. As humanoid bots displace workers in factories and outside, governments are likely to lose a lot of tax revenue. In the US lost payroll taxes and taxes that support Social Security, Medicare and Unemployment Insurance programs could be partially recouped with a ROBot tax.
- Net profit margins are 29%.
- Tax tax revenue exceeds Tesla profit.
- Bots do not have unemployment benefits, workers compensation claims, Social Security benefits or healthcare costs.
- Bots could be a significant part of a solution to saving government entitlement programs like Social Security, Medicare, Medicaid, Unemployment and welfare.
- Bots address labour shortages
- Bots can be used in hazardous workplace
- Slavery in many countries continues. Bots would provide cheaper labour than even providing food to slaves so neutralises economics of slavery.
- Investors give the company a P/E multiple of 30 for steady, growing, high margin earnings. None of the numbers in the model are discounted to the present as there are no implied time frames.
Value of Humanoid Model’s Results:
Each bot generates
- $43,200 in annual revenue
- $12,700 in annual profit
- $380,000 to market capitalisation of Tesla
- $18,000 of tax receipts to Govt (a new robotax of 33% and 21% income tax on Tesla profit from the BOTS)
|Number of Bots (million)||Profit $b||Market Cap $t|
PE of 30
|Tax Receipts ROBot tax + corporate income tax(trillion)|
CernBasher acknowledges contribution from @jamesdouma and @GoingBallistic5 for input and feedback.
Flippy Food Cook Robot
The Miso Robotics food cooking robot, Flippy demonstrates the value from robots. Flippy can cook the chips (fries) and serve drinks in fast-food kitchens. The cost of their AI system is half that of the cost of wages for normal restaurant staff. Does not take days off, call in sick etc.
- Subscription model offered. Monthly fees start at $3,000
- Includes equipment, maintenance, service calls, and support.
- The fixed subscription cost makes it suitable for high-volume restaurants with high average hourly pay
- Labour cost breakeven point is ~ 6-7 hrs labour per day at $15 per hour.