Tesla has confirmed plans to cease production of its two longest-running electric vehicles, the Model S sedan and the Model X SUV, starting next quarter. CEO Elon Musk announced the decision during the company’s Q4 2025 earnings call, signaling a significant shift in the manufacturer’s long-term operational strategy.
Repurposing the Fremont Facility
The manufacturing lines at the Fremont, California plant currently dedicated to the Model S and Model X will be overhauled to accommodate the large-scale production of Optimus humanoid robots. Tesla aims to reach a production capacity of one million robots annually. Despite the end of production, Musk stated that the company will maintain technical and service support for existing owners of these legacy models for the duration of their vehicle lifecycles.
Financial Performance and Strategic Pivot
The decision follows a Q4 2025 earnings report that indicated a decline in both sales volume and overall revenue. Tesla leadership described this period as a transition phase, moving away from a traditional hardware-focused business model toward becoming a “physical AI company.” While the flagship models are being retired, production will continue for the following vehicles:
- Model 3 sedan
- Model Y crossover
- Cybertruck
Legacy of the Flagship Models
The Model S, which debuted in 2012, was instrumental in establishing Tesla as a viable premium automaker, eventually offering a high-performance Plaid variant capable of 1,020hp. The Model X followed in 2015, introducing a seven-seat layout and its signature double-hinged “falcon wing” rear doors. In the Indian market, the Model Y currently remains the brand’s sole offering.
