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Tesla Discontinues Model S and X, Shifts Focus to Robots
Automaker plans to transform Fremont factory to produce Optimus robots
Mar. 17, 2026 at 10:25pm
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Tesla has announced it will discontinue production of the Model S and X electric vehicles by the end of the second quarter, ending June 30. The company plans to repurpose the production capacity at its Fremont factory to focus on building its Optimus humanoid robot, with the goal of producing 1 million units annually. While the Model S and X are seen as outdated compared to Tesla's newer models, the move represents a significant shift in the company's business vision.
Why it matters
Tesla's decision to discontinue the Model S and X raises concerns about the company's near-term sales performance, as the remaining Model 3 and Y are also aging. Additionally, Tesla's plan to double capital expenditures to over $20 billion could mean the company will soon be spending more cash than it takes in, a reversal from its recent history of positive cash flow.
The details
Tesla has deemed the Model S and X as "naturally obsolete" due to rapid advancements in the electric vehicle industry. The company plans to transform its Fremont factory to focus on producing its Optimus humanoid robot, with the long-term goal of building 1 million units annually. However, significant Optimus production is not expected until the end of 2026, and analysts have expressed concerns about the steep learning curve, personnel turnover, and Tesla's history of falling short of production targets.
- Tesla will discontinue production of the Model S and X by the end of the second quarter, which ends on June 30, 2026.
- Significant production of the Optimus robot is not expected until the end of 2026.
The players
Tesla
An American electric vehicle and clean energy company founded in 2003, known for its innovative electric vehicles and renewable energy products.
Optimus
Tesla's humanoid robot project, with the long-term goal of producing 1 million units annually.
BYD Company
A Chinese multinational manufacturer of automobiles, electric vehicles, and rechargeable batteries, which has recently overtaken Tesla in global EV sales.
What they’re saying
“Tesla formalized its ambitious new direction: The company is burning the boats, pinning its future on autonomous cars and robots.”
— Piper Sandler, Analyst
What’s next
The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.
The takeaway
Tesla's decision to discontinue the Model S and X and shift its focus to Optimus robots represents a significant strategic shift for the company, raising concerns about its near-term sales performance and cash flow. Investors will need to closely monitor Tesla's progress in developing and scaling its Optimus robot technology, as well as the company's ability to maintain sales momentum with its aging Model 3 and Y vehicles.
