(NYSE:MS ) analyst said buzz around Tesla was less about EVs and more about its innovations in robotics and AI. While concerns over the EV market's headwinds, including competitive pressure from China and potential margin compression, loom large, the focus is shifting to Tesla’s full self-driving (FSD) advancements, robotaxi milestones, and humanoid robots like Optimus. Morgan Stanley noted Tesla's humanoid robot, Optimus, could become one of Tesla's most valuable ventures, despite its absence from current valuation models. Analysts view this as a broader trend within the "embodied AI" space, encompassing machines capable of navigating and interacting with the physical world—ranging from drones and autonomous vehicles to humanoid robots. Though 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 AI grows, supply chain security and resilience are becoming critical concerns. Tesla's integration of hardware and AI capabilities gives it a potential edge in addressing the supply chain bottlenecks and manufacturing challenges that plague the robotics industry. Analysts suggest Tesla's expertise in vertical integration and its ties with SpaceX and xAI, a company founded by CEO Elon Musk, could position it as a leader in this domain. Moreover, Musk’s influence on policy discussions around autonomous vehicles could accelerate regulatory frameworks, enabling faster adoption of AI-powered technologies like robotaxis. Tesla's embodied AI ventures could redefine its growth trajectory. Analysts are revising models to incorporate the potential revenue streams from AI-driven industries, including autonomous ridesharing and intelligent robotics. "Tesla's role in helping to 'fill the void' of next gen manufacturing and supply chain will be an increasingly consequential driver of growth and shareholder value, in our opinion," Morgan Stanley analysts said. While Tesla remains synonymous with EVs, its AI ambitions may signal a new chapter for the company, one where robots, not cars, take center stage. Tesla's role in the increasingly embodied AI world View all comments (0)