Tesla to End Model S and Model X Production as Fremont Shifts to Optimus Robot Manufacturing, Musk Says
Tesla will end production of the Model S and Model X by the end of Q2 2026 as Fremont is repurposed to build Optimus humanoid robots, CEO Elon Musk said on the company’s Jan. 28, 2026 earnings call.
- Model S and X production will wind down next quarter and stop by end of Q2 2026 (announced on Tesla’s Jan. 28, 2026 earnings call; sources: Fox Business, Electrek, Edmunds).
- Fremont factory will be retooled for Optimus humanoid robot production and other initiatives, with Tesla projecting theoretical capacity of up to 1 million Optimus units per year using a new supply chain (Fox Business, Electrek).
- Q4 2025 revenue and EV sales fell: Q4 revenue down 3% to $24.9 billion; full-year 2025 revenue down 3% to $94.8 billion; EV sales fell ~16% in Q4 (Fox Business).
- “Other models” deliveries were low in 2025 (about 50,850 — S/X believed under 30,000), leaving unused Fremont capacity and prompting the strategic pivot (Electrek).
What Musk announced on the earnings call
On the Jan. 28 earnings call, Elon Musk told investors Tesla would wind down the Model S and Model X programs next quarter and stop manufacturing them in 2026. He described the decision as giving the two programs “an honorable discharge,” and urged buyers who remain interested to place orders soon. The remarks followed Tesla’s release of quarterly results showing weaker revenue and falling EV sales. Reporters and industry outlets captured the comments; Tesla has not issued a separate press release expanding on the plan. (Sources: Fox Business, Electrek, Edmunds.)
Sales and financial context
Tesla’s Q4 2025 revenue fell 3% to $24.9 billion, and full-year 2025 revenue slipped 3% to $94.8 billion, according to the company’s report and its presentation on the call. The automaker said EV sales were down about 16% in Q4 2025 versus Q4 2024. Total deliveries for 2025 were 1.64 million vehicles, with the cheaper Model 3 and Model Y accounting for roughly 97–98% of sales. The “other models” group (Model S, Model X, Cybertruck and Semi) delivered about 50,850 units in 2025; S/X deliveries are believed to be under 30,000. Quarterly “other models” deliveries fell from 23,640 in Q4 2024 to 11,642 in Q4 2025, with a low point earlier in 2025. The drop in high-end sedan and SUV sales left significant unused capacity at Fremont. (Sources: Fox Business; Electrek.)
Market competition and the decline of S/X
Launched in 2012 (Model S) and 2015 (Model X), these vehicles were once Tesla’s prestige models. But increased competition in the premium EV segment — from cars such as the Lucid Air and SUVs like the Rivian R1S — combined with changing buyer preferences and Tesla’s pricing moves, have reduced demand for S and X models. Tesla gave the S and X a mild refresh in June 2025 and raised prices; even so, demand continued to slip. Industry observers note that producing low-volume, high-spec cars in a plant designed for very large output is a poor fit for Tesla’s current volume strategy. (Sources: Fox Business; Electrek; Edmunds.)
Strategic pivot: Optimus robots and autonomy
Musk and Tesla are shifting capital and factory space toward autonomy and robotics. The company said it will repurpose Fremont space to support Optimus humanoid robot production and other initiatives. Company material cited plans to unveil a third-generation Optimus this quarter and invest in six new production lines in 2026 for vehicles, robots, energy storage and batteries. Tesla said a retooled Fremont could, in theory, reach Optimus production of 1 million units per year, supported by a new supply chain. Industry analysts are cautious: robot mass-production at scale presents different challenges than auto assembly, and timelines for Optimus mass-market adoption remain uncertain. (Sources: Fox Business; Electrek.)
Operational timeline and what’s next for S/X owners
Tesla signaled production will wind down in the coming quarter and stop in 2026. Musk encouraged buyers to order while inventory lasts. The company has not announced direct replacement models for the S and X lines. Media reports and community forums captured the announcement quickly after the call, but Tesla offered no further public detail on timing for factory retooling, exact job impacts, or supply-chain shifts. Owner communities and automotive forums are tracking remaining inventory and used-market implications in real time. (Sources: Electrek; Tesla Motors Club thread; CarBuzz.)
Implications for the world
Economic impact: The move will reshape production and supplier demand globally. Car parts suppliers that built components for the Model S and X will see orders fall. Some suppliers may win new Optimus contracts; others may not. Major markets — including Europe — will watch whether Tesla shifts parts sourcing to new robotics suppliers. Tesla’s claim of redeploying Fremont capacity to Optimus could preserve some jobs if robot production scales, but retooling and new supply chains may cause short-term disruption. (Sources: Fox Business; Electrek.)
Political consequences: Governments that back EV manufacturing and green jobs will reassess incentives and local planning. In Europe, policymakers pushing EV adoption may examine how automakers balance vehicle production with other technologies. The pivot highlights the risk governments face when single companies shift strategies suddenly. Regulators in the EU and other regions will also monitor Optimus for safety and liability rules if robots become common in workplaces or public spaces. (Source: Fox Business.)
Social effects: Tesla owners, service networks and secondhand markets will feel the change. Fewer new S/X units will reach the market, likely raising the value of well-maintained used models for a period. Service centers and parts channels must adapt. Workers at Fremont and in supplier plants may face retraining or relocation if production lines change focus. Consumer trust in Tesla’s long-term product support will matter for brand loyalty worldwide. (Sources: Electrek; Edmunds.)
Cultural relevance: The Model S and X have symbolic value. They helped make EVs desirable and signaled that electric cars could be high-performance luxury items. Ending their production underscores how fast the EV market is evolving and how a company once defined by flagship models can pivot toward software and robotics. For European consumers, where premium marques are central to automotive identity, the shift raises questions about whether US EV makers will focus more on volume and tech than on high-end German-style craft. (Sources: Edmunds; Electrek.)
Practical applications for everyday people: Buyers considering a Model S or X should weigh warranty and service prospects, as production wind-down affects future parts availability and resale values. Companies and governments evaluating robotics for factories or public use will watch Tesla’s Optimus tests and the third-generation reveal. For workers, the change may create retraining opportunities in robotics assembly, battery lines or software, but timelines and job counts remain unclear. (Sources: Fox Business; Electrek.)
Reporting notes and sources
This report is based on coverage of Tesla’s Q4 2025 earnings call, company statements on the call, and reporting by multiple outlets and community forums. Coverage and analysis drew on the following sources for primary context and further detail:
The decision to end the Tesla Model S and Model X run and repurpose the Fremont factory for Optimus robot production marks a major strategic shift in Elon Musk’s Tesla strategy. The coming months will test whether Tesla can smoothly move from premium vehicle assembly toward large-scale robotics while managing the economic and social effects for workers, suppliers and customers worldwide.
