Tesla Ends an Era: Model S and Model X Make Way for Optimus Robots
Tesla is officially closing a historic chapter in its automotive journey. During the company’s fourth-quarter earnings call, CEO Elon Musk announced that production of the Model S sedan and Model X SUV will end by the second quarter of 2026. The move signals a major strategic shift, as Tesla pivots away from legacy vehicles toward autonomy and robotics.
The production lines at Tesla’s Fremont, California factory, currently dedicated to Model S and X, will be repurposed to manufacture Optimus humanoid robots, with a planned capacity of one million units per year.
“It’s time to bring the Model S and X programs to an honorable close,” Musk said, emphasizing that Tesla’s future is increasingly centered on autonomous systems.
The End of Tesla’s Longest-Running Models
Launched in 2012, the Model S played a pivotal role in making electric vehicles appealing to mainstream consumers. The Model X, introduced in 2015, followed with its iconic falcon-wing doors and premium positioning. Despite their legacy, demand for both models has declined sharply as Tesla focused on the more affordable and scalable Model 3 and Model Y.
In 2025, Tesla delivered just 50,850 vehicles in its “Other Models” category, which includes the Cybertruck and Semi. Analysts estimate that only around 30,000 units of that figure were Model S and X. By comparison, Model 3 and Model Y deliveries exceeded 1.58 million units during the same period.
Although Fremont retains an annual capacity of 100,000 units for Model S and X, utilization has been minimal for several years.
Optimus Takes Center Stage
Musk confirmed that the freed-up production capacity will be fully dedicated to Optimus, Tesla’s humanoid robot project. While the long-term goal is mass production at scale, Musk cautioned that meaningful output will likely begin toward the end of the year.
Tesla also plans to unveil Optimus Gen 3, a version optimized for large-scale manufacturing, within the next three months. According to industry reports, more than 1,000 Optimus robots are already operating inside Tesla’s factories. Musk believes Optimus could eventually have a significant impact on U.S. GDP.
Financial Backdrop and Strategic Direction
The announcement came alongside Tesla’s latest financial results. The company reported $24.9 billion in fourth-quarter revenue, surpassing analyst expectations despite a 3% year-over-year decline. Net profit fell 61% to $840 million, while operating expenses surged 39% to $3.6 billion.
Tesla also revealed a $2 billion investment in Musk’s artificial intelligence company, xAI, reinforcing its long-term vision beyond traditional automotive manufacturing.
Tesla assured customers that Model S and Model X vehicles will continue to receive service and support for as long as they remain on the road. However, once existing inventory is sold out, both models will be permanently discontinued.
