ELON MUSK SAYS OPTIMUS WILL MAKE TESLA WORTH HALF OF THE ENTIRE S&P 500

Plus, automakers are worried about high new car inventory, and Stellantis doesn't want to be protected by EV tariffs.

Tesla is branching out further from being just another car company every day. The automaker's latest focus has been on AI, but that's only part of its ultimate goal, which includes unleashing a billion humanoid robots on the world each year. But CEO Elon Musk's latest financial "projections" about this push need a grain of salt—or a truckload of it.

Welcome to Critical Materials, your daily roundup for all things EV and automotive tech. Today, we're chatting about Tesla's prediction of being worth half of today's S&P 500 value, Ford's freak-out over the return to pre-COVID industry inventory levels, and Stellantis' rejection of the EU's tariffs on imported Chinese EVs. Let's jump in.

30%: Elon Musk Says Optimus Will Make Tesla Worth $25 Trillion

Tesla Optimus robot on one foot

Musk said at last night's Tesla Annual Shareholder Meeting that the automaker's latest in-development product, a humanoid robot once portrayed by a person dancing in a suit, will one day make the company worth $25 trillion.

For context, as CNBC's Lora Kolodny and Ari Levy point out, that's more than half of the value of the S&P 500, which measures the market capitalization of the 500 largest publicly traded companies in the U.S. and is currently valued at around $45.5 trillion. At the market's close on Thursday, Tesla's market cap was around $575 billion, making it the 10th most valuable player on the index.

In other words, robots and AI are supposed to make Tesla valuable at unprecedented levels.

Musk made the prediction during just after his $56 billion compensation package was once again ratified by shareholders following the rejection from a Delaware judge. According to the CEO, Optimus will be one of many humanoid robots eventually on the market. He also compared them to Star Wars' C-3PO and R2-D2, noting they may eventually be able to cook, clean, and even teach children.

It's not clear just how long Musk believes it will take Tesla to hit $25 trillion valuation. During the call, the CEO agreed with recent price targets published by Cathie Wood, CEO of ARK Invest. Wood's targets would set a price of around $2,600 per share by 2029—making its market cap around $8 trillion—and was a prediction based on Tesla's yet-to-launch robotaxi business being successful.

The stock closed at $183.57 on Thursday.

Divesting Tesla into multiple different business units seems to be the key to its perceived value. From energy storage to solar—and soon robotaxis, robots, and rolling data centers—investors see Tesla as more of a tech company that builds cars. In a recent note by a J.P. Morgan analyst, investors were worried that Tesla could be valued like "just another automaker" if CEO Elon Musk's pay package were to fail and he was to depart the company.

It's hard to overstate just how ambitious of a goal this is. However, Musk believes that Tesla's upper hand is being able to move more quickly than other companies and ultimately produce a superior product. The automaker predicts it will have "a few thousand" Optimus robots performing various tasks in its factories by the end of 2025. Then again, "end of the year" is often code for "at some point, maybe" in Muskworld.

60%: Manufacturers Are Freaking Out About Auto Inventory Returning To Pre-COVID Numbers

Ford Explorer EV production start in Cologne, Germany

Ford is worried about the rising inventory on dealer lots across the country. Not just for EVs, either—for all cars.

CFO John Lawler, who will soon become the company's vice chair, warned that the automaker is keeping a close eye on inventory numbers, potentially signaling that the COVID-era purchasing bubble is finally close to bursting.

"It worries me that the stocks are building," said Lawler at Deutsche Bank's Global Auto Industry Conference. "We haven't seen that impact so far, but we are watching it very closely."

A recent report by Automotive News highlights how new vehicle inventory has lingered below 3 million vehicles for nearly four years. In fact, numbers have dropped since May of 2020 when new vehicle inventory last topped 3 million units. Since then, the pandemic affected new vehicle inventory by shutting down production and creating complex supply chain issues.

Today's inventory sits at 2.89 million vehicles, or a supply of around 73 days. A month ago, the inventory was 2.86 million cars, and a year prior to that, just 1.9 million. And in the fall of 2021, new vehicle inventory had fallen to just 820,000 vehicles.

Vehicle inventory has now started to stockpile as demand cools across the industry—from EVs to new vehicles in general, dealership lots are getting more full by the day. In April, Ford was sitting on a surplus inventory of around 100 days according to Cox Automotive. The automaker is targeting between 50 and 60 days of inventory.

"If you get into the situation where you have a lot of vehicles that we call the pink polka dots, you're gonna run into trouble, so we're watching it closely," Lawler said. "It hasn't been a contagion onto us yet. We're still seeing strength and I think primarily because much of our product is new."

Lawler does warn that Ford believes it will continue to see pressure on the top line, especially in its electrified segment, which could result in lower vehicle prices later this year.

90%: Stellantis Says It Doesn't Want To Be Protected By EV Tariffs And "Knows What To Do" To Succeed

Carlos Tavares, Stellantis CEO

Just like its stance with the impending U.S. tariffs against Chinese-built EVs, Stellantis is denouncing similar protectionist tariffs proposed for the European Union.

Stellantis CEO Carlos Tavares denounced the tariffs announced earlier this week and boldly stated that the automaker would prefer to "fight to stay competitive" than be protected by tariff-inflated prices imposed on competition.

Behind the curtain, it would appear that European carmakers are far more worried about retaliatory measures from the Chinese government which could affect profits generated by the world's largest car market.

Here's what Tavares had to say regarding the lasting effect of protectionist tariffs (via The Guardian):

The German industry is very much exposed to Chinese business and this is the reason why Germany is expressing a negative option about those tariffs

Correcting the tariff is correcting a lack of competitiveness. We prefer to race than to be told that we are going to be protected, because we do not believe that being protected is a long-lasting competitive position for a company like ours.

We are going to fight to be as competitive as we should be in the performance of the products, in the range, in the affordability; we’re going to compete because we are a global company.

Under the new tariffs proposed by the EU, imported Chinese EVs could be subject to an additional tariff of up to 38.1% to defend against "unfair subsidization." This levy would be applied on top of the existing 10% import tariff already imposed on vehicles imported into the EU.

It's not clear exactly how China could retaliate to these tariffs, however, the country recently urged the EU to "listen carefully" to its objections and warned that imposing these tariffs could threaten EV adoption and climate goals.

100%: What Problem Could Robots Solve For You?

Tesla Optimus humanoid robots walking

Tesla has a number of goals for the Optimus robots to accomplish, from cooking to cleaning, and even teaching children. It's a lofty goal, and one we're treating with the requisite skepticism.

That being said, Tesla isn't alone in chasing such robots. So what problems would humanoid robots solve for you? Could this solve an accessibility need, a convenience, or is it more of a novelty? And on top of that, what would you pay for something that could deliver on those promises? Let me know in the comments.