Tesla Shifts Focus to Robotaxis and Humanoid Robots as EV Sales Decline

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Tesla reported a 9% decline in electric vehicle sales in 2025 as it faces increasing competition, particularly from Chinese automaker BYD. In response, CEO Elon Musk announced that Tesla will discontinue the Model S and Model X to free up manufacturing capacity for its autonomous Cybercab robotaxi and the Optimus humanoid robot. While these new initiatives hold promise, they still face regulatory and technical hurdles before reaching mass production.

Why it matters

Tesla's shift away from passenger EVs toward autonomous vehicles and humanoid robots signals a major strategic pivot for the company. If successful, these new products could open up lucrative new revenue streams, but the transition also carries substantial risk as Tesla's core EV business faces declining sales.

The details

Tesla sold 1.63 million passenger EVs in 2025, a 9% drop from the prior year, as it loses market share to competitors offering more affordable options. To address this, Tesla will discontinue production of the Model S and Model X to focus resources on the Cybercab robotaxi, which will run on Tesla's Full Self-Driving software, and the Optimus humanoid robot, which Musk believes could generate $10 trillion in revenue long-term. However, the Cybercab still needs regulatory approval before it can launch, and Optimus faces an uncertain timeline as Tesla builds out the entire supply chain.

• Tesla reported its Q4 2025 results on January 28, 2026.
• Musk said Tesla could have autonomous vehicles in up to half of U.S. states by the end of 2026.
• The Cybercab robotaxi is expected to enter mass production in April 2026 at the earliest.

What’s next

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