Tesla Ends Model S And Model X Production To Build Optimus Robots At Fremont Factory

Tesla will stop building the Model S and Model X after Q2 2026. The Fremont, California production lines that built the two vehicles for over a decade will be retooled to manufacture Optimus humanoid robots instead.

• The fact: CEO Elon Musk announced on Tesla’s Q4 2025 earnings call that both models will receive an “honorable discharge” after final units roll off the line next quarter.
• The shift: Fremont will gain workers, not lose them. Tesla plans to ramp Optimus production on the freed-up lines.
• For buyers: “If you’re interested in buying a Model S and X, now would be the time to order it,” Musk told investors.

The Model S Helped Make Electric Cars Mainstream

The Model S launched in 2012 as a luxury sedan that proved electric vehicles could compete with gasoline-powered cars on range and performance. The Model X followed in 2015 with its signature falcon-wing doors and SUV form factor. Together, they built Tesla’s reputation before the mass-market Model 3 and Model Y took over as volume sellers.

Sales have been falling for years. In 2025, Tesla sold just 50,850 units in its “other models” category, which includes the Model S, Model X, and Cybertruck. That number represents a 40.2% decline from the prior year, according to The Verge.

Tesla said it will continue supporting existing Model S and Model X owners “for as long as people have the vehicles.”

Optimus Takes Over The Production Lines

Musk framed the decision as a forward-looking move rather than an admission of declining demand. “It’s time to basically bring the Model S and X programs to an end with an honorable discharge, because we’re really moving into a future that is based on autonomy,” he said during the call.

The Fremont factory will be converted to produce Optimus humanoid robots, with Tesla planning to add workers at the plant rather than cut them. This fits Tesla’s broader strategy of pouring resources into AI and robotics while its traditional vehicle business faces growing competition.

Musk has previously said he believes Optimus could eventually become more valuable than Tesla’s entire automotive division. The company outlined a $20 billion capital spending plan for 2026 focused on AI infrastructure and robotaxi expansion.

Q4 Earnings Show The Pressure Behind The Decision

The Model S and X announcement came during a mixed Q4 2025 earnings report. Tesla posted $24.9 billion in revenue for the quarter, with GAAP net income of $840 million, a 61% drop from $2.1 billion a year earlier. Lower EV sales and rising expenses drove the decline.

Tesla shares closed at $431.46 on January 28, barely moving on the news. Extended trading pushed the stock to $439.24, up 1.80%. A full breakdown of Tesla’s Q4 earnings is coming in a separate EVXL article.

The company also announced a $2 billion investment in Musk’s xAI artificial intelligence venture, further signaling where Tesla sees its future as it loses ground in traditional EV markets.

EVXL’s Take

The Model S was the car that made people stop laughing at electric vehicles. It made EVs cool. It proved that an electric sedan could embarrass a BMW M5 at a stoplight and still carry four adults in comfort. Ending its run is the clearest signal yet that Tesla sees itself as an AI and robotics company that happens to sell cars.

The timing makes sense financially. Why keep two low-volume, high-cost models on life support when you can repurpose those lines for Optimus — the product Musk keeps insisting will define the next decade? With combined S/X/Cybertruck sales down over 40%, the math stopped working.

But here’s the thing worth watching: used Model S and Model X prices are about to move. The moment “final production” becomes official, collector premiums will kick in for low-mileage examples. Expect used Model S Plaid prices to climb 10-15% by mid-2026 as the “last ones made” narrative takes hold. The Model X Plaid, already rare, could see even sharper increases.

For current owners, Tesla’s promise of indefinite support is reassuring but vague. Replacement parts availability five years from now? That’s the real question nobody on the earnings call asked.

Editorial Note: This article was researched and drafted with the assistance of AI to ensure technical accuracy and archive retrieval. All insights, industry analysis, and perspectives were provided exclusively by Haye Kesteloo and our other EVXL authors, editors, and YouTube partners to ensure the “Human-First” perspective our readers expect.