Tesla $TSLA ( ▲ 3.33% ) is preparing to discontinue production of its Model S and Model X vehicles next quarter as it redirects factory capacity toward building its humanoid robot, Optimus. The move underscores Elon Musk’s push to reframe Tesla as an AI and robotics company rather than just an automaker.
Out with S and X, in with robots
On the earnings call, Musk said the production lines currently used for the luxury sedan and SUV would be converted into an Optimus factory. While those models helped define Tesla’s early brand, they now represent a tiny slice of overall sales compared with the mass-market Model 3 and Model Y.
The shift makes Tesla’s long-promised pivot toward autonomy and robotics more tangible, though it also means phasing out two of its highest-priced consumer vehicles.
Big ambitions, limited present-day output
Musk has said Tesla could eventually produce far more Cybercabs and robots than traditional cars. But those products are still largely in development. Optimus is not yet commercially available, and Tesla’s Robotaxi rollout remains extremely limited.
Meanwhile, traditional vehicle sales still account for the majority of Tesla’s revenue. That creates a gap between the company’s current business reality and the AI-driven future it is investing in.
Investors weigh the transition
Because the Model S and X make up a small portion of Tesla’s total sales, the operational impact may be limited in the short term. But symbolically, the decision highlights how aggressively Tesla is betting on robotics and autonomy — areas that could transform the company if successful, but remain uncertain in timing and scale.
For now, Tesla $TSLA is accelerating its identity shift, even as its core car business still pays most of the bills.