Tesla Ends Model S And X To Build Robots

In a move that’s shaking up the electric vehicle (EV) industry and redefining one of its most iconic brands, Tesla CEO Elon Musk announced on January 28, 2026, that the company will discontinue production of its long-running Model S sedan and Model X SUV next quarter. The decision, revealed during Tesla’s fourth-quarter earnings call, marks the end of an era for two vehicles that helped shape the modern EV market—and signals a bold new direction for the company: robotics and artificial intelligence.

“It’s time to basically bring the Model S and X programs to an end with an honorable discharge, because we’re really moving into a future that is based on autonomy,” Musk told investors, as reported by InsideEVs and other industry outlets. While the announcement was tinged with nostalgia—Musk called it a “sad” moment—he was clear that Tesla is pivoting to focus on autonomous technology and robotics, using the freed-up space at its Fremont, California, factory to build the ambitious Optimus humanoid robots.

The Model S and Model X, launched in 2012 and 2015 respectively, have been Tesla’s luxury flagships for over a decade. The Model S, in particular, was Tesla’s first mass-produced vehicle after the limited-run Roadster and is widely credited with making long-range electric cars both desirable and practical. The Model X, with its distinctive gull-wing doors, followed as a high-tech three-row SUV. However, despite their pioneering status and regular over-the-air technology updates, both vehicles have seen their share of Tesla’s sales dwindle in recent years. In 2025, the two models accounted for just 50,850 deliveries globally—a mere 3% of Tesla’s total of 1,636,129 vehicles, according to Motor1 and Car and Driver. By contrast, the more affordable Model 3 and Model Y together made up a staggering 1.6 million deliveries.

With the EV market facing headwinds, and Tesla’s most expensive models losing relevance, the company’s leadership decided it was time to move on. “If you’re interested in buying a Model S and X, now would be the time to order it,” Musk advised, acknowledging that production is winding down soon. The last major update for these vehicles came in 2021 with the release of the high-performance Plaid versions, but their days as Tesla’s technological showpieces are over.

What’s next for the Fremont factory? Robotics, at a scale that’s hard to fathom. Tesla plans to repurpose the former Model S and Model X production lines to manufacture Optimus humanoid robots, with a target of producing one million units annually. Musk has described the Optimus project as “still largely experimental,” but he’s betting big on its potential to transform industries far beyond automotive. At the World Economic Forum in Davos earlier this month, Musk said he expects Tesla to begin selling Optimus robots by the end of 2027. The company’s bold vision is that these robots will one day perform a range of tasks—from household chores to surgery—ushering in what Musk calls “a world of amazing abundance.”

This pivot isn’t just about hardware. Tesla is also investing heavily in artificial intelligence. During the same earnings call, Musk announced a $2 billion investment in xAI, an AI company he founded. The move is intended to build efficiencies for Tesla, as integrating xAI’s technology means the carmaker won’t have to develop similar AI capabilities in-house. “We’re just doing what shareholders asked us to do, pretty much,” Musk said, emphasizing that many investors supported the xAI partnership. Tesla’s CFO, Vaibhav Taneja, added that Grok—the chatbot developed by xAI—is already being used across Tesla’s fleet. “Today, if you look at Tesla vehicles, we are using Grok in there,” Taneja said, highlighting the growing role of AI in Tesla’s future.

The company’s focus on autonomy was further underscored by updates on its robotaxi program. Tesla now operates 500 robotaxis in Austin and San Francisco, and has begun conducting “randomly selected paid rides” with no safety driver in Austin. While the company is still in the early phase of deploying its robotaxi fleet, and revenue and cost per mile metrics are “not meaningful to discuss at the moment,” according to Taneja, the ambition is clear: Tesla wants to lead the transition to driverless mobility. The company also revealed, for the first time, how many customers are subscribing to its Full Self Driving (FSD) software—1.1 million in 2025, up from 800,000 in 2024. That’s a significant jump, even as Musk has faced criticism for missing previous autonomy targets and for the slow pace of delivering profits from self-driving technology.

Financially, Tesla’s Q4 2025 results showed both challenges and resilience. Revenue was $24.9 billion, a 3% drop year-over-year, which analysts attributed to a slowdown in EV sales following the end of federal tax credits. Yet, the company still managed to beat Wall Street estimates of $24.8 billion, and shares rose about 1.8% in after-hours trading. The decision to discontinue the Model S and Model X, while emotional for longtime fans, is seen by some analysts as a pragmatic response to shifting market dynamics.

As for Tesla’s remaining vehicle lineup, the company reaffirmed its commitment to future products that have been long in the pipeline. The steering wheel-free Cybercab, the Semi truck, and the Roadster supercar are all still on the way, though details and timelines remain vague. Meanwhile, the Model 3 and Model Y continue to drive the bulk of Tesla’s sales, especially after recent overhauls.

There was even a political undertone to Musk’s remarks. He referenced the need for a hypothetical rare earth refinery in America—a nod to supply chain concerns and the time he’s spent with former President Trump over the past year. Musk also revealed a shift in Tesla’s corporate mission, from “to accelerate the world’s transition to sustainable energy” to “build a world of amazing abundance,” reflecting the company’s expanding ambitions beyond cars and energy into AI and robotics.

For now, the end of the Model S and Model X marks a turning point not just for Tesla, but for the broader EV landscape. These vehicles helped define what electric cars could be, setting standards for range, performance, and technology. As they drive off into the sunset, Tesla is betting that the future belongs to robots and AI—a gamble as audacious as any in the company’s history.

With production lines set to churn out a million humanoid robots a year, and AI at the core of its evolving identity, Tesla is once again challenging the world to imagine what comes next.