Tesla Model S and Model X to Be Discontinued Soon, Elon Musk Confirms

During the January 28, 2026 earnings call, Musk was characteristically direct. "Now is basically the time for the Model S and X projects to have an honorable discharge," he said, adding a clear message to potential buyers: "If you are interested in purchasing a Model S or X, now is the time to order" .

The move clears the way for a dramatic pivot. Tesla plans to transform the Fremont factory, converting the lines that produced these two flagship models into a massive production facility for the Optimus robot. Musk's ambition is to eventually produce one million humanoid robots annually, though he acknowledged that the supply chain for robots is entirely new and separate from automotive .

The "honorable discharge" comes at a time when Tesla is facing its first annual revenue decline in history. For 2025, revenue fell 3% to $94.8 billion, while net income plunged 46% to just $3.8 billion . Fourth-quarter net income was down a staggering 61% .

Delivery figures tell a stark story:

• Total 2025 global deliveries: 1.63 million vehicles (down 8.6% from 2024) .
• Model 3 and Model Y accounted for roughly 1.58 million of that total .
• Model S, Model X, Cybertruck, and Semi combined for just over 50,000 units .
• Industry estimates suggest the S and X alone sold only about 30,000 units globally in 2025 .

The Fremont factory has the capacity to build 100,000 S and X vehicles annually . With demand barely reaching a third of that, the decision to repurpose the space is as much a pragmatic response to low sales as it is a strategic pivot to robotics.

It's difficult to overstate the impact of the Model S. When it launched in 2012, it was the first credible luxury electric vehicle that could outperform gasoline rivals in nearly every metric . The Model X followed in 2015, bringing its distinctive falcon-wing doors and becoming one of the first premium electric SUVs .

These two vehicles proved that Tesla wasn't just another startup. They funded the development of the Model 3 and Model Y, built the Supercharger network, and established the brand's reputation for performance and innovation. For years, the Model S outsold the Mercedes S-Class, BMW 7 Series, and every other luxury sedan in its class .

Today, that competitive edge has dulled. Competitors like the Lucid Air, Mercedes EQS, Porsche Taycan, and BMW i7 have caught up or surpassed Tesla in range, interior quality, and technology. Tesla responded to this pressure by repeatedly cutting prices rather than significantly updating the aging platforms .

With the S and X lines closing, the Fremont factory will be converted into a primary production hub for Tesla's Optimus humanoid robot. Musk outlined a target of reaching an annual production capacity of one million robots at the facility .

However, analysts have pointed out an uncomfortable truth: despite years of flashy demonstration videos, Musk admitted on the same earnings call that the current generation of Optimus robots in the factory are "still in the early stages" and not actually performing useful work . The much-hyped videos of robots folding laundry or walking through the factory were, according to Musk, essentially "learning exercises" rather than indications of production-ready capability .

This hasn't slowed Tesla's ambition. A third-generation Optimus, designed specifically for mass production, is scheduled to be unveiled in the first quarter of 2026 .

For prospective buyers: Musk's advice is clear—order now if you want a new one. Once the production lines are converted, there will be no more . Some dealerships may still have inventory, and Tesla will likely fulfill existing orders through Q2.

For current owners: Tesla has committed to continuing service, parts availability, and software updates for the foreseeable future . While it's common for manufacturers to support vehicles long after production ends, the long-term prognosis for parts availability on low-volume flagship models is always worth monitoring.