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Tesla Discontinues Iconic Model S and Model X Electric Cars
The company shifts focus to autonomous robots as sales decline.
Jan. 29, 2026 at 4:47am
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Tesla has confirmed it will stop production of its iconic Model S sedan and Model X SUV, as the company reallocates resources to its autonomous robot development. While the Model S and Model X will continue to exist in Tesla's fleet, the company says it needs to convert the production space at its Fremont factory to build its Optimus robot. This pivot comes as Tesla reports its first annual revenue decline, with deliveries down 9% in 2025.
Why it matters
The discontinuation of the Model S and Model X marks the end of an era for Tesla, as these vehicles were instrumental in establishing the company as a leader in the electric vehicle market. However, Tesla's shift towards autonomous robotics signals a strategic pivot as the company believes the future of transportation will be better served by self-driving platforms rather than traditional human-driven cars.
The details
Tesla reported $3.8 billion in annual GAAP net income on $94.8 billion in revenue in 2025, a 3% year-over-year decline. Deliveries were also down 9% to 1.64 million vehicles compared to 2024. In the earnings call, CEO Elon Musk confirmed plans to reallocate resources saved from the Model X and Model Y towards the development of the company's Optimus autonomous robot. The third generation of Optimus is expected to be unveiled in the coming months and will be able to learn by observing human behavior.
- Tesla introduced the Model S in 2012.
- The Model X, Tesla's first family SUV, was introduced shortly after.
- In 2025, the Model S and Model X accounted for only 2.8% of Tesla's total revenue.
- Tesla will stop production of the Model S and Model X next quarter.
The players
Tesla
An American electric vehicle and clean energy company that designs and manufactures electric cars, battery energy storage from home to grid-scale, solar panels, and related products.
Elon Musk
The CEO and co-founder of Tesla, who announced the company's plans to discontinue the Model S and Model X in order to focus on autonomous robot development.
Optimus
Tesla's humanoid robot project, which the company plans to prioritize as it shifts resources away from the Model S and Model X production.
What they’re saying
“S and X will always continue to exist in the fleet, just not in production, but it's still a little sad.”
— Elon Musk
“We are going to convert that production space to an Optimus factory. It's part of our overall shift to an autonomous future.”
— Elon Musk, CEO
“It's going to be a very capable robot.”
— Elon Musk, CEO
What’s next
Tesla plans to unveil the third generation of its Optimus robot in the coming months, which will be able to learn by observing human behavior.
The takeaway
Tesla's decision to discontinue the iconic Model S and Model X marks a strategic shift for the company as it doubles down on its autonomous robotics efforts, signaling a future where self-driving platforms may play a more prominent role in transportation than traditional human-driven vehicles.
