Tesla Retires Model S and X as Sales Slump Signals End of an Era

Tesla is officially retiring the vehicles that defined its rise as a luxury electric vehicle pioneer. CEO Elon Musk confirmed on Wednesday's earnings call that production of the Model S and Model X will cease next quarter, closing the chapter on the company's first ground-up vehicle programs.

The decision, while emotionally charged for the brand's loyalists, is grounded in stark commercial reality. Recent delivery data reveals a steep decline for these legacy models. Tesla groups the Model S, Model X, and Cybertruck under "other models," a category that saw global sales plummet to 50,850 units in 2025—a mere 3% of Tesla's total 1.63 million deliveries and a 40% drop from the previous year. In contrast, the mass-market Model Y and Model 3 accounted for a staggering 1.59 million sales combined.

Introduced in 2012, the Model S shattered perceptions of EV performance and luxury. The 2015 Model X, with its controversial falcon-wing doors, aimed to conquer the lucrative SUV segment. However, the X was plagued by complex manufacturing challenges, which Musk once likened to crafting a "Fabergé egg." While Tesla refreshed its volume models aggressively in 2025, updates to the S and X were comparatively minor, signaling a shift in strategic priority.

"It's time to bring the Model S and X programs to an end with an honorable discharge," Musk stated, acknowledging the move was "slightly sad." He framed the discontinuation as necessary to reallocate resources toward a future centered on autonomy and robotics, specifically the ambitious Optimus humanoid robot project, which Musk envisions producing at a scale of one million units annually.

The pivot highlights Tesla's evolution from a niche luxury automaker to a mass-market player and now, a company betting its future on artificial intelligence and automation. However, analysts urge caution regarding the immediate financial payoff. "The company appears on track with Robotaxi and new vehicle launches," noted Steve Man, senior auto analyst at Bloomberg Intelligence. "But a commercially viable Optimus robot likely remains years away, leaving a revenue gap from the retired luxury lines."

Reader Reactions:

David Chen, Tech Portfolio Manager, San Francisco: "This is a cold but calculated business move. The numbers don't lie. Redirecting capital from low-volume, complex production lines to high-growth potential areas like autonomy is textbook portfolio management. Sentiment can't drive strategy forever."

Marcus Johnson, Tesla Owners Club Chapter President, Austin: "It feels like a betrayal. The Model S put Tesla on the map. These were the cars that built the brand's mystique. Now they're being cast aside for robots and taxis. Musk is forgetting the passionate community that funded his early dreams."

Priya Sharma, Automotive Industry Analyst, London: "The retirement marks a definitive end to Tesla's 'Phase 1.' It's a natural maturation for any automaker—sunsetting older models to focus on volume sellers and next-gen tech. The real test is whether Optimus can transition from a compelling demo to a profitable product line before competition in core auto markets intensifies."

Tesla did not immediately respond to a request for additional comment.