Tesla Phases Out Model S and Model X, Retools Fremont Factory for Robotics Push
In a move that marks the end of an era for electric vehicle pioneers, Tesla announced Wednesday it will discontinue production of its Model S sedan and Model X SUV next quarter. The decision, revealed during the company's earnings call, underscores a dramatic strategic shift toward robotics and autonomous technology.
The Fremont, California factory space currently dedicated to these long-running models will be retooled to manufacture Tesla's Optimus humanoid robots. The company confirmed plans to eventually scale the facility to produce up to 1 million units annually, transforming a cornerstone of its auto manufacturing heritage into a hub for its robotic future.
This transition had been foreshadowed for months. Demand for the high-end Model S and X has waned significantly in recent years, overshadowed by the mass-market dominance of the Model 3 and Model Y, which together accounted for 1.6 million global deliveries in 2025. In contrast, all other models, including the S and X, totaled just over 50,000 units. Tesla had already relegated the duo to an "Other models" category in its quarterly reports, and availability had dwindled in many markets.
"This was a difficult decision, but a necessary one to focus our resources on the next generation of technology," a Tesla executive stated on the call. The company emphasized that its pipeline remains full, with the steering wheel-free Cybercab, the Semi truck, and the long-awaited next-generation Roadster still in development, suggesting new vehicles will eventually fill the void left by the departing flagships.
Industry Reaction:
"It's the end of a chapter," said Michael Chen, an automotive historian at Stanford. "The Model S redefined what an electric car could be—a luxury performance machine. Its phase-out is symbolic. Tesla is no longer just a car company; it's betting its future on being a robotics and AI company."
"This is a reckless abandonment of their core identity," argued Sarah Jennings, a former Tesla brand manager and now a vocal industry critic. "The S and X built the brand's halo. Killing them to chase sci-fi robots feels like a desperate pivot from a company struggling to innovate in its actual business. What happens to the loyal customers who invested in these premium vehicles?"
"From an operational standpoint, it makes perfect sense," noted David Park, a manufacturing analyst at Bernstein. "Freeing up capital and factory space for higher-margin, scalable technology is a classic portfolio optimization move. The volumes for S and X were negligible. This is about resource allocation for the next growth phase."
The discontinuation of the Model S and X, which first hit roads in 2012 and 2015 respectively, closes a foundational period for Tesla. Once the vehicles that proved EVs could be desirable and high-performance, they are now making way for CEO Elon Musk's vision of a future centered on autonomous mobility and large-scale automation.