Tesla (TSLA) has a "competitive edge" in bringing humanoids to market because of its manufacturing scale and vertical integration, RBC Capital Markets said in a note Wednesday.

The brokerage said development of Optimus V.3, expected to be launched in Q1, continues to be a "significant challenge."

But RBC said the company believes its manufacturing scale can bring costs down unlike its competitors.

Humanoid makers also have to be vertically integrated, which is something that the company currently does with its car business, the firm added.

RBC maintained the company's outperform rating and $500 price target.

Tesla shares were down over 3% in recent Thursday trading.

Price: 425.40, Change: -13.57, Percent Change: -3.09