During its Q4 2025 earnings call, Tesla CEO Elon Musk outlined a bold new business model in which every Model 3 and Model Y could be loaned into a company-owned robotaxi fleet, transforming privately owned EVs into revenue-generating assets. To accommodate this shift, Tesla will discontinue production of its flagship Model S sedan and Model X SUV, repurposing the freed capacity at its Fremont factory for the manufacturing of Optimus humanoid robots and the upcoming Cyber Cab—an FSD-optimized, wheel-less, pedal-less vehicle slated to begin production in Q2 2026.

Tesla has amassed over 6 billion supervised Full Self-Driving miles and more than 250,000 unsupervised miles in Austin alone, according to Musk. The company projects the removal of all safety drivers in selected Austin deployments within months, with plans to expand fully driverless operations into 8 to 10 additional metropolitan areas by the end of 2026. These milestones are critical to achieving regulatory approval and scaling the robotaxi network as envisioned.

Tesla’s Q4 net income fell 61% year-over-year, while its trailing price-to-earnings ratio stands at approximately 293x, signaling market expectations of transformative growth. Musk’s announced $20 billion capital expenditure budget for 2026—more than double the 2025 figure—is earmarked for autonomy development, semiconductor fabrication, and humanoid robot scaling. On social-media forums, bearish sentiment spiked following the Model S/X discontinuation announcement, underscoring investor anxiety over execution risk: Tesla has sacrificed two high-margin product lines to chase a future revenue stream that hinges on unproven autonomy and regulatory outcomes.