Tesla Discontinues Model S and Model X
What happened
Tesla has announced it will discontinue its Model S and Model X vehicles to shift focus toward autonomy and robotics. CEO Elon Musk cited a strategic move away from high-cost, low-volume cars, as Q4 deliveries of the S/X models were just 12,881 compared to 323,800 for the Model 3/Y. The company plans to repurpose production space for its Optimus robot, with a planned investment of $20 billion in the robotics division.
Why it matters
- The Model S, first delivered to customers in 2012, was a landmark vehicle that proved electric cars could be both desirable and high-performance. It was followed by the Model X SUV in 2015, which was developed on the same platform. - This strategic shift is part of a broader company mission change, from "accelerate the world's transition to sustainable energy" to "amazing abundance," reflecting a deeper focus on AI and robotics. - The production space at the Fremont, California factory, previously used for the Model S and X, will be converted into a manufacturing plant for the Optimus humanoid robot. - Tesla's stated goal is to eventually produce one million Optimus units annually at the repurposed Fremont facility. - While the company is pivoting, it is not abandoning the auto market entirely and will continue to produce the higher-volume Model 3 and Model Y. - Elon Musk has projected that the Optimus robot business could eventually make Tesla a $25 trillion company and that the robots could be priced between $20,000 and $30,000. - The Optimus robot utilizes the same advanced AI systems that were developed for Tesla's Full Self-Driving vehicle technology. - This move comes as Tesla's GAAP net income dropped by 46% in the 2025 fiscal year, from $7.1 billion in 2024 to $3.8 billion.
Key numbers
- CEO Elon Musk cited a strategic move away from high-cost, low-volume cars, as Q4 deliveries of the S/X models were just 12,881 compared to 323,800 for the Model 3/Y.
- The company plans to repurpose production space for its Optimus robot, with a planned investment of $20 billion in the robotics division.
- - The Model S, first delivered to customers in 2012, was a landmark vehicle that proved electric cars could be both desirable and high-performance.
- It was followed by the Model X SUV in 2015, which was developed on the same platform.
What happens next
- The Model S, first delivered to customers in 2012, was a landmark vehicle that proved electric cars could be both desirable and high-performance.
- The production space at the Fremont, California factory, previously used for the Model S and X, will be converted into a manufacturing plant for the Optimus humanoid robot.
- While the company is pivoting, it is not abandoning the auto market entirely and will continue to produce the higher-volume Model 3 and Model Y.
Quick answers
What happened in Tesla Discontinues Model S and Model X?
Tesla has announced it will discontinue its Model S and Model X vehicles to shift focus toward autonomy and robotics. CEO Elon Musk cited a strategic move away from high-cost, low-volume cars, as Q4 deliveries of the S/X models were just 12,881 compared to 323,800 for the Model 3/Y. The company plans to repurpose production space for its Optimus robot, with a planned investment of $20 billion in the robotics division.
Why does Tesla Discontinues Model S and Model X matter?
The Model S, first delivered to customers in 2012, was a landmark vehicle that proved electric cars could be both desirable and high-performance. It was followed by the Model X SUV in 2015, which was developed on the same platform. This strategic shift is part of a broader company mission change, from "accelerate the world's transition to sustainable energy" to "amazing abundance," reflecting a deeper focus on AI and robotics. The production space at the Fremont, California factory, previously used for the Model S and X, will be converted into a manufacturing plant for the Optimus humanoid robot. Tesla's stated goal is to eventually produce one million Optimus units annually at the repurposed Fremont facility. While the company is pivoting, it is not abandoning the auto market entirely and will continue to produce the higher-volume Model 3 and Model Y. Elon Musk has projected that the Optimus robot business could eventually make Tesla a $25 trillion company and that the robots could be priced between $20,000 and $30,000. The Optimus robot utilizes the same advanced AI systems that were developed for Tesla's Full Self-Driving vehicle technology. This move comes as Tesla's GAAP net income dropped by 46% in the 2025 fiscal year, from $7.1 billion in 2024 to $3.8 billion.
