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During Tesla’s earnings call, CEO Elon Musk announced both models that will be discontinued in the second quarter of 2026.
Is Tesla saying goodbye? Not entirely—but it is bidding farewell to its Model S sedan and Model X SUV. During the company’s earnings call, CEO Elon Musk announced that both models will be discontinued in the second quarter of 2026. Musk confirmed that production is being scaled back in order to focus on autonomous technology, robotics, and the “Optimus humanoid robot” project.
The automaker plans to convert space at its Fremont, California factory, where the Model S and Model X are currently built, into a facility dedicated to Optimus production. Musk described the move as an “honorable retirement” for the vehicle models, as Tesla continues to push forward toward a future centered on autonomy.
The decision is part of a strategic shift toward a future driven by artificial intelligence and robotics, rather than relying on low-volume electric vehicle sales. Despite calling it a “sad” moment for Tesla, Musk stated that the production space currently used for the Model S and Model X will eventually be capable of producing one million Optimus robots per year.
As we shift to an autonomous future, Model S & X production will wind down next quarter.
— Tesla (@Tesla) January 29, 2026
If you’d like to own one of them, now’s a good time to place your order.
Tesla wouldn’t be what it is today without Model S & X and their (early) owners – thank you for your support over… pic.twitter.com/4J06T1QjVM
Tesla says goodbye to the Model S and Model X
Although Tesla’s first vehicle was the Roadster, it was the Model S that truly placed the company at the forefront of the modern electric vehicle era. The sedan was launched in 2012 as Tesla’s first mass-produced vehicle, as the Roadster had essentially been a limited-production proof of concept. Following its major success, the Model S opened the door to the global electric car market. Three years later, Tesla added the Model X to its lineup, a three-row SUV that stood out for its striking falcon-wing doors.
The decision to discontinue both models does not come as a surprise to the automotive industry. In recent years, production costs for the Model S and Model X have no longer been proportional to their sales, and both models have gradually accounted for an increasingly smaller share of Tesla’s global sales.
With this announcement, it might appear that Tesla is de-emphasizing electric vehicle production; however, Dan Coatsworth, market analyst at investment platform AJ Bell, noted that it will continue to be a fundamental part of the business. “Tesla still needs this part of its business to run smoothly, as it helps fund Musk’s robotic vision, which is becoming more ambitious by the day,” Coatsworth said.
In 2025, the Model 3 and Model Y accounted for a total of 1.6 million deliveries in the United States, compared to just 50,850 units for the rest of the lineup. As a result, the Model 3 and Model Y are now positioned as Tesla’s core offerings for the mass market and its primary source of future revenue.
In addition, Tesla reaffirmed that the steering-wheel-free Cybercab, the Semi truck, and the Roadster supercar remain in development and are still on track.
Optimus 3 humanoid robot
Tesla’s next major focus will be humanoid robots, a segment that has accelerated thanks to advances in physical artificial intelligence (AI). As part of this new phase, the company plans to invest $200 million in xAI, Elon Musk’s artificial intelligence firm.
The “Optimus” humanoid robot has been in development for years, and according to Musk, it is intended to become the biggest product of all time. Musk stated this week that Optimus 3 will “make a difference” in U.S. GDP.
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