Tesla will officially stop producing the Model S and Model X by the end of Q2 2026. CEO Elon Musk confirmed the decision during the company’s Q4 2025 earnings call, saying it was time to bring both programs to an end. Launched in 2012 and 2015, these vehicles were Tesla’s first premium models and played a major role in proving that electric cars could be desirable, fast, and luxurious.

Falling Demand and Aging Platforms

Sales of the Model S and X have been declining for years. By 2025, estimated deliveries dropped to around 30,000 units globally, far below Fremont’s 100,000-unit capacity. The models also faced strong competition from newer rivals like the Lucid Air and Rivian R1S. A minor refresh in 2025, paired with a price increase, failed to revive interest, making the discontinuation feel inevitable.

Fremont Factory Gets a New Role

Tesla’s Fremont factory will no longer focus on these low-volume premium cars. Instead, the production lines will be converted for advanced manufacturing projects, most notably Tesla’s humanoid robot, Optimus. This marks a clear shift in strategy away from legacy models toward future technologies.

Optimus and Tesla’s Bigger Bet

Optimus has been in development for years and is now a top priority. Tesla plans to begin production before the end of 2026, with possible public sales in 2027. Musk believes Optimus could become Tesla’s most important product, supported by major investments in AI and xAI.

The Future of Tesla

This move shows that Elon Musk believes Tesla has already achieved its original EV goal. Electric cars are now widely accepted, and they no longer need to be strongly pushed or explained to the public. Premium models like the Model S and X no longer offer enough growth to justify Tesla’s time and money. 

Musk clearly sees a bigger opportunity elsewhere. By shifting focus to Optimus, AI, and autonomy, Tesla is moving away from being just a car company. The future Tesla looks more like an AI and robotics company, using cars maybe to fund a much larger vision where intelligent machines play a central role in everyday work and life.

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