Tesla is killing its iconic Model S and Model X electric cars — here's the reason why

The Tesla Model S has earned a place in the long and impressive history of the car industry. Introduced in 2012, the electric car went toe-to-toe with luxury sedans from the legacy automakers and proved that electric cars were viable in the United States.

Now, 14 years later, Tesla has confirmed it will stop production of the car, as well as the Model X. The latter, with its famous falcon-wing doors, was the company's first approach to a family SUV. Like the Model S, it was a massive hit across the country.

But times move on, and in Tesla's earnings call this week, the company confirmed it needed to change gears. When combined, the Model S and Model X only accounted for 2.8% of Tesla's total revenue in 2025. But beyond that, by stopping production, Tesla can utilize the space at its Fremont factory to build robots.

“S and X will always continue to exist in the fleet, just not in production, but it’s still a little sad,” Elon Musk wrote in a post on X.

The pivot into robotics comes at an interesting time for Tesla. In the earnings call, the company reported $3.8 billion in annual GAAP net income on $94.8 billion in revenue — which comes out to a year-over-year decline of 3%. It's the first time annual revenue has fallen for the car company. Moreover, deliveries were down 9% to 1.64 million vehicles compared to 2024.

The future is robots

In the earnings call, Musk confirmed plans to reallocate resources saved from the Model X and Model Y towards its autonomous robot development.

“We are going to convert that production space to an Optimus factory. It’s part of our overall shift to an autonomous future,” Musk said on the call.

Tesla is doubling down on its autonomy efforts, operating under the belief that general transportation will be better served by autonomous platforms than traditional human-driven ones. So expect to hear more about the company's $30,000 Cybercab in the coming years.

But as well as cars, humanoid robots will dictate the future of Tesla. The company's Optimus product has been around since 2022 and the third generation could be unveiled in the next few months. The Optimus 3 is apparently able to learn by observing human behavior, instead of having to program it to perform certain tasks.

"It's going to be a very capable robot," Musk said on the earnings call.

Whether or not the Optimus robot will achieve a place in the history books alongside the Model S remains to be seen.

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