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Tesla to Transition Fremont Factory from Cars to Humanoid Robots
Elon Musk says the company will phase out Model S and X production to focus on Optimus robot manufacturing.
Jan. 29, 2026 at 1:47pm
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Tesla CEO Elon Musk announced that the company will end production of its flagship Model S and Model X electric vehicles and convert its Fremont, California factory to mass-produce Optimus humanoid robots. The move marks a major strategic shift for Tesla as it pivots toward robotics and artificial intelligence amid financial pressures and increased competition in the EV market.
Why it matters
This decision underscores Tesla's broader focus on robotics and AI as the company seeks new growth opportunities beyond its core automotive business. The transition of the Fremont factory signals Musk's belief that Optimus robots will ultimately eclipse Tesla's vehicle sales in value and importance.
The details
Musk said it was "time to basically bring the Model S and X programs to an end with an honorable discharge" and encouraged customers to order the vehicles soon before production ends. Tesla did not respond to a request for comment. The Model S and X currently make up the high end of Tesla's vehicle lineup, with the S starting around $95,000 and the X around $100,000. The decision comes as Tesla faces declining profits, with its annual net income dropping 46% in 2025 amid EV market challenges.
- On January 22, 2026, Musk said he expects Tesla to begin offering Optimus robots for public sale by the end of 2027.
- In a September 1, 2025 post, Musk wrote that he estimates "80% of Tesla's value will be Optimus" in the future.
The players
Elon Musk
The CEO of Tesla who announced the company's plans to transition its Fremont factory from car production to manufacturing Optimus humanoid robots.
Tesla
An American electric vehicle and clean energy company that is shifting its focus toward robotics and artificial intelligence under Musk's leadership.
Optimus
A humanoid robot designed by Tesla to perform repetitive or labor-intensive tasks, which Musk believes will ultimately eclipse the company's automotive business in value.
What they’re saying
“Time to basically bring the Model S and X programs to an end with an honorable discharge.”
— Elon Musk, CEO, Tesla
“Everyone on earth is going to have one and want one.”
— Elon Musk
What’s next
Tesla has not provided a specific timeline for when it will complete the transition of the Fremont factory from car to robot production, but Musk has said he expects Optimus robots to be available for public sale by the end of 2027.
The takeaway
Tesla's pivot from electric vehicles to humanoid robots signals the company's ambition to dominate the emerging robotics and AI markets, even as it faces challenges in its core automotive business. This strategic shift could have far-reaching implications for the future of transportation and labor-intensive industries.
