- Tesla will end Model S and Model X production as early as next quarter
- Production space at Fremont will convert to Optimus humanoid robot factory
- Tesla aims for full vehicle autonomy and scaling Optimus robot production
Tesla Inc said it plans to wind down production of its Model S and Model X vehicles as early as next quarter, marking the end of its longest-running car programmes as the company shifts capacity towards autonomous technology and humanoid robots.
Chief Executive Officer Elon Musk said the decision reflects Tesla's move towards a future centred on autonomy, rather than personally driven vehicles. “It's time to basically bring the Model S and X programs to an end with an honorable discharge,” Musk said during the company's earnings call on Wednesday.
The Model S, launched in 2012, and the Model X, introduced in 2015, helped establish Tesla as a premium electric vehicle maker and played a central role in its early growth. Musk acknowledged the emotional weight of ending the programmes but said the shift was necessary. “It is slightly sad,” he said, “but it is time.”
Musk said Tesla expects to wind down Model S and X production in the coming quarter and will repurpose the existing production space at its Fremont factory for Optimus, the company's humanoid robot. “We're going to take the Model S and X production space in our Fremont factory and convert that into an Optimus factory,” he said.
The company said it will continue to support Model S and X vehicles already on the road after production ends.
Shift To Autonomy And Robotics
Musk said the decision to end Model S and X production aligns with Tesla's broader push toward fully autonomous vehicles and robotics. “We're really moving into a future that is based on autonomy,” he said, adding that the company expects most vehicle miles in the future to be driven without human intervention.
Tesla expects to begin producing Optimus robots at scale and has set a long-term target of manufacturing up to one million units a year at the Fremont site once the factory conversion is complete. Musk said the Optimus supply chain is entirely new, which will result in a slower initial production ramp.
Cybercab To Overtake Traditional Vehicles
Musk said Tesla expects its Cybercab, a steering-wheel-free autonomous vehicle, to become the dominant product in its automotive lineup over time. “We would expect, over time, to make far more Cybercabs than all of our other vehicles combined,” he said.
He said Tesla plans to start Cybercab production in April, with volumes rising gradually. The vehicle is designed for full autonomy and optimised for cost per mile rather than owner-driven use, Musk said.
Tesla executives said autonomy will shift the company's business model from car sales to transport services, with Robotaxi fleets operating across multiple cities. Musk said Tesla already has fully autonomous vehicles operating without safety drivers in Austin, Texas.
Heavy Investment Phase Ahead
Chief Financial Officer Vaibhav Taneja said 2026 will be a heavy investment year, with capital expenditure expected to exceed $20 billion as Tesla builds new factories and expands capacity for robotics, energy storage, autonomous vehicles and artificial intelligence infrastructure.
Musk said Tesla is making large investments in batteries, AI chips, energy products and robotics to support what he described as a long-term shift toward an autonomous and automated economy. “We're making very, very big investments,” he said.
Tesla ended the year with more than $44 billion in cash and investments, which management said gives it flexibility to fund the next phase of expansion.
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