Tesla CEO Elon Musk announced the company will stop producing its Model S sedan and Model X SUV, discontinuing two of its longest-running vehicles as the automaker faces its first annual sales decline on record.
According to CNBC, Musk revealed plans to end production on both models during Tesla’s fourth-quarter earnings call in late January, revealing plans to convert the Fremont, California factory lines to manufacture Optimus humanoid robots instead.
“It’s time to basically bring the Model S and X programs to an end,” Musk said on the call, according to The Guardian. “We expect to wind down S and X production next quarter.” He added: “If you’re interested in buying a Model S and X, now would be the time to order it.”
Tesla introduced the Model S in 2012 as a premium sedan, adding the Model X sport utility vehicle three years later. Both occupied the luxury line for the company, with pricing beginning near $95,000 for the sedan and around $100,000 for the SUV, per current listings.
The automaker reported total revenue dropped 3% year over year in 2025, marking its first-ever annual decline. Deliveries in the fourth quarter showed a 16% year-over-year decrease, while automotive revenues fell 11% during the same period.
Tesla is planning to reveal the third generation of Optimus in the first quarter of 2026, describing it as the first version engineered for large-scale manufacturing.
Ultimately, the decision is likely to have a negative impact on customers exploring Tesla’s premium EV options, while existing owners are likely to face uncertainty around parts availability, service support, and resale values.
The Guardian described the change as “the clearest sign yet that Tesla is pivoting away from its electric car business.” While Optimus robots generate no current revenue, customers and the environment definitely need cleaner, more eco-friendly transportation options today.
What’s more, Tesla’s broader struggles are compounding these concerns — the Cybertruck saw sales plummet 48% in 2025, per Kelley Blue Book data, while BYD overtook Tesla as the world’s largest EV maker with a 28% growth in total sales.
Despite Tesla’s product eliminations, the electric vehicle marketplace continues to grow, with several manufacturers introducing new options and pricing tiers. Prospective EV owners can explore a growing array of options for sedans and SUVs that deliver quality maintenance and customer service.