Tesla Phases Out Model S and X to Focus on Robotics
Tesla is set to phase out the production of its Model S and Model X electric vehicles as part of a significant strategic shift. CEO Elon Musk announced this change during the company’s earnings call for the 2025 fiscal year.
Tesla’s Shift: Phasing Out Model S and X
Musk indicated that the transition away from the Model S and Model X is driven by a focus on autonomy. He stated, “It’s time to bring the Model S and X program to an end with an honorable discharge.” This change marks a pivotal moment for Tesla as it reallocates resources toward the development of robotics.
Future of Production Space
The Fremont factory will be repurposed for manufacturing the Optimus humanoid robots. According to Tesla, production of the Model S began in 2012, while the Model X has been in production since 2015. However, sales for these models have declined significantly.
- In 2025, Tesla delivered 1,585,279 units of the Model 3 and Y.
- Only 418,227 units of the Model S and X were sold in the same year.
- Sales of the Model S and X were halted in China in mid-2025 due to tariff issues.
Long-term Vision for Robotics
Musk has ambitious plans for the Optimus robot, projecting a future production goal of 1 million units within the space previously dedicated to the Model S and X. The company aims to start public sales of the humanoid robot by late 2024, as announced during the World Economic Forum in Davos, Switzerland.
Despite the optimism surrounding Optimus, the robot has faced challenges in demonstrations. Musk’s previous timelines have often seemed overly ambitious.
Investments and Controversies
The company’s recent earnings report revealed a $2 billion investment in Musk’s other venture, xAI. This has raised concerns among Tesla shareholders, who filed a lawsuit against Musk in 2024, arguing that xAI directly competes with Tesla. Nevertheless, shareholders approved Musk’s substantial $1 trillion pay package in late 2025, contingent upon the company achieving an $8.5 trillion market valuation.
As Tesla progresses toward a future defined by robotics, the legacy of the Model S and X will serve as a foundation for this next chapter of innovation.
