Tesla Retires Model S and X, Shifts Focus to Autonomous Future and Robotics
PALO ALTO, Calif. — In a move signaling a strategic pivot, Tesla Inc. (NASDAQ: TSLA) will cease production of its long-standing premium models, the Model S sedan and Model X SUV. CEO Elon Musk made the announcement during the company's fourth-quarter earnings call, framing the decision as a necessary step to reallocate resources toward an autonomous and robotic future.
"With an honorable discharge, it's time to bring the Model S and X programs to a close," Musk told investors, noting that production will effectively halt next quarter. Since their respective launches in 2012 and 2016, Tesla has delivered approximately 730,000 to 740,000 units of these vehicles, which helped establish the brand's luxury electric credentials.
The Fremont, California factory lines that currently produce the Model S and X will be retooled to manufacture the Optimus humanoid robot, a cornerstone of Tesla's broader automation strategy. Musk also revealed plans to eventually convert the Cybertruck into a "fully autonomous line," potentially for driverless cargo transport. This comes as the angular electric pickup has faced commercial headwinds, with sales reportedly plunging 48% in 2025.
The quarterly results provided a strong backdrop for the announcements. Tesla reported earnings of 50 cents per share on revenue of $24.9 billion, surpassing analyst estimates. The company also plans to unveil its third-generation Optimus robot this quarter and confirmed a planned $2 billion investment into Musk's AI venture, xAI, pending regulatory approval in early 2026.
On social media platform X, Musk expressed a tinge of nostalgia, writing, "S and X will always continue to exist in the fleet... but it is still a little sad."
Reaction & Analysis
Michael Chen, Automotive Analyst at Stanford Research: "This isn't just a product lifecycle decision. It's a clear signal that Tesla views its future value in autonomy and robotics, not in maintaining a broad vehicle portfolio. Retiring these halo models frees up immense capital and engineering bandwidth."
Sarah Johnson, Tesla Investor since 2015: "It feels like the end of an era. The Model S was the car that proved EVs could be desirable. I understand the strategic shift, but there's an emotional loss here. What happens to the brand's luxury appeal?"
David Park, Tech Blogger & EV Enthusiast: "Frankly, this smacks of desperation. The Cybertruck isn't selling, so they're pivoting the narrative to 'autonomy'—a promise we've heard for a decade. Killing your most iconic models to chase robots feels like a gamble with shareholder money."
Dr. Lisa Wang, Robotics Professor at MIT: "The repurposing of an auto plant for humanoid robot production is the more significant story here. If Tesla can achieve scale and cost-effectiveness in robotics, it could disrupt manufacturing and logistics far beyond the automotive sector."
Photo courtesy: Del Harper via Shutterstock