Tesla to Discontinue Model S and X, Freeing Fremont Space for Robot Production
Tesla will phase out Model S and Model X production at its Fremont factory, reallocating capacity to build Optimus humanoid robots starting later this year. The move follows a multi-year decline in vehicle deliveries and underscores Elon Musk’s shift from premium EVs towards autonomous robotics.
1. Discontinuation Decision
Tesla announced it will discontinue its flagship Model S sedan and Model X SUV, ending a key chapter of its luxury lineup. Both models will cease production as the company reallocates resources to support next-generation initiatives.
2. Fremont Factory Reconfiguration
The freed capacity at its Fremont, California facility will be converted into an Optimus humanoid robotics factory. Tesla plans to shift assembly lines and tooling from vehicle platforms to robot production by mid-2026.
3. Declining Premium EV Demand
Deliveries of Model S and X have trended downward since late 2022, contributing to Tesla’s first annual revenue decline in 2025. The premium vehicle segment saw lower consumer demand during Tesla’s aggressive price war and macroeconomic headwinds.
4. Strategic Pivot to Robotics
Elon Musk is repositioning Tesla away from established EV sales towards autonomous fleets and robotics. The Optimus factory marks the first major step in his vision to integrate AI-driven products into Tesla’s core business.