Prime Highlights:
- Tesla will stop making its Model S and Model X cars and convert its Fremont factory to build Optimus humanoid robots.
- CEO Elon Musk said this move marks a new chapter, as the company focuses on self-driving technology and advanced robotics.
Key Facts:
- The Model 3 and Model Y made up 97% of Tesla’s 1.59 million vehicles sold last year, with prices starting at $37,000 and $40,000, respectively.
- Tesla plans to produce one million Optimus robots per year at the Fremont facility, with the third-generation design set for mass production.
Background:
Tesla CEO Elon Musk announced on Wednesday that the company will end production of its Model S sedan and Model X SUV, repurposing its Fremont, California, factory to manufacture Optimus humanoid robots. Speaking on Tesla’s fourth-quarter earnings call, Musk described the move as giving the “Model S and X programs an honorable discharge” and encouraged interested buyers to place orders soon.
The Model S and Model X are Tesla’s oldest vehicles after the original Roadster, with the sedan first launched in 2012 and the SUV in 2015. In recent years, Tesla reduced prices on both models as competition in the global electric vehicle market intensified. The Model S currently starts at around $95,000, while the Model X is priced near $100,000.
Despite their historical significance, the vehicles now account for a small fraction of Tesla’s sales. Last year, the Model 3 and Model Y made up most of Tesla’s sales, accounting for 97% of the 1.59 million vehicles delivered. The Model 3 starts at about $37,000, and the Model Y is around $40,000.
In 2025, Tesla’s revenue dropped for the first time, with sales falling in most of the year. Musk said the company is now focusing on self-driving cars and robots, moving beyond its regular electric vehicles.
The Optimus project is developing bipedal robots that could handle tasks ranging from factory work to helping at home. Tesla plans to unveil the third generation of Optimus this quarter, marking the company’s first mass-production-ready design. Musk stated that the Fremont production line for the Model S and X will be replaced with a facility capable of producing one million Optimus units annually.
“Because it is a completely new supply chain, there’s really nothing from the existing Model S and X production that carries over to Optimus,” Musk said. He also noted that Tesla expects to increase both headcount and output at the Fremont facility significantly as production ramps up.
Tesla’s move shows the company’s plan to shift from luxury electric cars to advanced robots, marking a new stage in its growth.
