Tesla ends Model S and X production to focus on Optimus robot manufacturing
By Tesla CEO Elon Musk has announced that production of the Model S and Model X will cease next quarter. The automaker plans to repurpose its Fremont factory to build humanoid robots called Optimus, targeting an ambitious output of one million units annually.
- Tesla will halt production of the Model S (launched in 2012) and Model X (introduced in 2015) in Q2 2026
- Fremont factory production capacity will be shifted to assembling Optimus robots, aiming for 1 million units per year
- In 2025, Tesla sold 1,585,279 Model 3 and Y vehicles compared to 418,227 Model S and X units
Why Tesla is discontinuing Model S and X
Musk revealed the decision during Tesla’s 2025 fiscal year earnings call.
he said. Buyers can still purchase remaining stock while supplies last, and Tesla will continue to support the vehicles as long as they remain in use.“It’s time to retire the Model S and X programs with honor because we’re moving toward a future based on autonomy,”
The Model S was Tesla’s second-ever model, launched in 2012, with the Model X SUV arriving in 2015. Over the years, demand for these models has dwindled, overshadowed by the newer Model 3 and Model Y. Tesla delivered 1,585,279 Model 3 and Y vehicles in 2025 alone, compared to just 418,227 of the Model S and X combined.
In mid-2025, Tesla also stopped selling Model S and X in China. The vehicles were imported from the U.S. and faced Chinese tariffs imposed in retaliation for the trade tariffs enacted by former president Donald Trump.
Optimus production plans
Musk said Tesla’s long-term goal is to produce one million Optimus robots annually at the Fremont factory, which currently assembles the Model S and X. Just days ago at the World Economic Forum in Davos, he announced that public sales of Optimus robots are expected to start by the end of next year.
Musk has repeatedly called Optimus “the biggest product of all time,” claiming it will surpass smartphones and “everything else.” However, current public demos have fallen short of these expectations, and Musk is known for setting overly optimistic timelines.
Financial highlights and the link to xAI
Tesla’s 2025 financial report revealed a $2 billion investment in Musk’s other venture, the AI startup xAI. In 2024, Tesla shareholders filed a lawsuit against Musk, arguing that xAI competes with Tesla. Musk has long maintained that Tesla is an AI company at its core, not just an electric car manufacturer.
At the end of 2025, Tesla shareholders approved a compensation package for Musk worth $1 trillion, contingent on Tesla’s market capitalization reaching $8.5 trillion.
