Source: TeslaTesla (NASDAQ: TSLA) will discontinue production of its Model S and Model X vehicles globally by the end of the second quarter of 2026, Chief Executive Officer Elon Musk said during the company’s fourth-quarter 2025 earnings call.The decision will allow Tesla’s Fremont, California factory to be converted into a large-scale production base for Optimus humanoid robots and Cybercab autonomous taxis, with a long-term target of up to 1 million humanoid robots annually. Musk said the company is shifting its strategic focus away from low-volume flagship vehicles toward automation, robotics, and artificial intelligence. He described vehicles as no longer being Tesla’s core product and positioned Optimus as central to the company’s next phase of growth.Tesla reported fourth-quarter 2025 revenue of $24.90 billion, down 3.1% year-on-year, and operating profit of $1.41 billion, down 11%, according to the company’s financial statement. Free cash flow fell 30% to $1.42 billion.For full-year 2025, Tesla reported revenue of $94.8 billion, down from $97.7 billion in 2024, marking the first annual revenue decline in the company’s history. Operating cash flow totaled $14.7 billion, while free cash flow was $6.2 billion. Cash and investments increased by $7.5 billion to $44.1 billion. Global vehicle deliveries fell for a second consecutive year. Tesla delivered 1.6361 million vehicles in 2025, down 8.6% from 1.789 million in 2024 and below market expectations of 1.65 million units, the company said.Model 3 and Model Y accounted for 1.59 million units, or 96.89% of total deliveries. All other models, including Cybertruck, Model S and Model X, totalled just 50,900 units. Combined global deliveries of Model S and Model X in 2025 were approximately 30,000 units. That compares with Fremont’s annual capacity of about 100,000 units for the two models, implying capacity utilization near 30%.Source: TeslaTesla stopped separately reporting Model S and Model X sales in 2023, grouping them under “other models,” reflecting their reduced contribution to overall volume.Model S was launched in 2012, with the first delivery on June 22, 2012, from Fremont. Model X followed in 2015 and became one of the earliest mass-produced all-electric full-size SUVs. Both vehicles played a central role in establishing Tesla’s premium positioning and in funding the later development and scale-up of Model 3 and Model Y.In China, Tesla removed Model S and Model X from sale in April 2025. The move followed the United States imposing a 25% tariff on imported vehicles effective April 3, 2025, and China adding an additional 84% tariff on U.S.-origin imports on top of existing rates. Because both vehicles are manufactured in the United States, the tariffs sharply increased their effective costs in China. Tesla stopped accepting new orders for the two models in the country, limiting customers to existing inventory.At the time of withdrawal, Model S and Model X were priced at approximately 842,900 CNY (c. $121,300) and 882,900 CNY (c. $127,000), respectively, according to company listings. Annual sales in China reportedly fell to fewer than 2,000 units.Musk said Fremont’s Model S and Model X lines will be replaced with Optimus and Cybercab production lines. Tesla is targeting annual Optimus production of up to 1 million units and has set a long-term cost target of around $20,000 per robot. Tesla has guided that capital expenditures in 2026 will exceed $20 billion, according to statements made on the earnings call and in company communications. The spending will support six new production lines across vehicles, robotics, energy storage, and battery manufacturing, along with expanded AI and compute infrastructure.Tesla also said it plans to reveal a more advanced Optimus V3 before the end of the first quarter of 2026, with production targeted later in the year. The company described its corporate mission as shifting toward building “Amazing Abundance” through robotics and physical AI.Musk acknowledged that Optimus supply chains remain underdeveloped and warned that production ramp-up would be slower and more difficult than previous vehicle launches, including Cybertruck. Tesla also said it may launch a next-generation Roadster in April and plans to begin mass production of Cybercab, Tesla Semi, and Megapack 3 in 2026.The end of Model S and Model X closes a chapter that helped define Tesla’s early growth, while placing Fremont at the center of a strategy that ties the company’s future more closely to robotics than to premium electric vehicles.Conversion rate: 1 USD = 6.951 CNY as of January 31, 2026
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