Tesla Halts Model S/X to Scale Optimus Robots with Shanghai, Terafab
Tesla’s Shanghai factory delivered 851,000 EVs in 2025 and will underpin mass production of Optimus robots after shipping under 500 units last year. The company will halt Model S/X production in Q2 to convert its Fremont plant for robot manufacturing and leverage Terafab custom silicon.
1. Shanghai factory’s dual role
Tesla’s Shanghai facility delivered 851,000 vehicles in 2025 and is set to support mass production of the Optimus humanoid robot after the company shipped fewer than 500 units last year, addressing the crucial scaling challenge identified by leadership.
2. Fremont conversion and model lineup change
In Q2, Tesla will end production of the Model S and X to convert its Fremont factory for Optimus robot manufacturing, marking a strategic shift from legacy vehicles to robotics-driven operations.
3. Impact of Terafab custom silicon
Tesla’s inclusion in Elon Musk’s Terafab custom silicon initiative, alongside SpaceX, will provide bespoke chips designed to enhance AI training and inference capabilities within its manufacturing and autonomous systems.