1. Short Description
Tesla is discontinuing its classic Model S and Model X to repurpose its Fremont factory for mass-producing its Optimus humanoid robot.
2. Read Time
3 minutes 10 seconds
3. Main Article
Tesla to End Model S/X Production, Pivots Factory to Optimus Robot
In a decisive move signaling a major corporate strategy shift, Tesla CEO Elon Musk announced on the company’s Q4 earnings call that production of the veteran Model S and Model X is ending. The automaker will repurpose its Fremont, California, factory lines to manufacture its Optimus humanoid robot at a scale targeting one million units per year. This decision underscores a dramatic pivot for Tesla, transitioning focus from its legacy luxury electric vehicles (EVs) toward what Musk envisions as the next frontier of automation and artificial intelligence.
The Model S and Model X, Tesla’s oldest and once flagship vehicles, have seen their significance wane within the company’s portfolio. In 2024, the more affordable Model 3 and Model Y accounted for 97% of Tesla’s global deliveries. The announcement comes amid significant headwinds for Tesla, which just reported its first annual revenue decline, reflecting intense global competition in the EV market. Musk is strategically steering investor and public attention toward futuristic initiatives like full self-driving and robotics, areas where Tesla currently generates minimal revenue but sees vast future potential.
Tesla stated it plans to unveil the third-generation Optimus this quarter, marking its first design intended for mass production. Musk emphasized that the robot represents a “completely new supply chain,” distinct from Tesla’s automotive operations. This factory retooling in Fremont is a tangible commitment to bringing Optimus from prototype to product. For finance-focused readers, this marks a high-risk, high-reward bet by Tesla to cultivate a new, multi-billion dollar market in advanced robotics, fundamentally altering its long-term business model beyond traditional automotive manufacturing.
4. Short Summary
Tesla is discontinuing its Model S and X to convert its Fremont factory for mass-producing the Optimus humanoid robot. This bold pivot addresses EV market pressures and aligns with Elon Musk’s strategy to transition Tesla into a leader in robotics and AI, potentially opening a vast new revenue stream beyond automotive.
