The move represents Tesla’s broader transformation from a traditional electric vehicle manufacturer to what Musk describes as an AI and robotics powerhouse, with autonomous technology at the centre of the company’s future strategy.
Tesla will discontinue its Model S sedan and Model X SUV globally next quarter as the company pivots toward artificial intelligence and robotics manufacturing.
Chief executive Elon Musk confirmed the decision during Tesla’s Q4 2025 earnings call, marking a significant shift in the company’s strategic direction away from traditional automotive manufacturing.
The production lines at Tesla’s Fremont facility in California, currently used for the S and X models, will be repurposed to manufacture the Optimus humanoid robot. The models have only been available in left-hand drive configuration in recent years, meaning no direct impact for Australian buyers.
Musk revealed ambitious production targets for the facility, aiming to produce 500,000 Optimus units annually once fully operational.
“It’s time to basically bring the Model S and X programs to an end with an honourable discharge, because we’re really moving into a future that is based on autonomy,” Musk said during the earnings call.
While acknowledging the decision was a “sad” moment for the company, Musk stated the transition is necessary for Tesla’s survival in an increasingly autonomous landscape.
The discontinuation reflects the stark difference in sales performance between Tesla’s model lines. Deliveries of the Model 3 and Model Y totalled 1.6 million units last year, while the S, X and Cybertruck combined reached just 50,000 units.
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