Tesla is closing the book on the cars that first made it a household name. On Wednesday, Elon Musk announced that the company is ending production of the Model S sedan and the Model X SUV. These are Tesla’s oldest and most expensive models, but Musk says it’s time to give them an “honorable discharge.”
If you still want to buy one of these original flagships, you’d better act fast. Musk told investors during the company’s fourth-quarter earnings call that now is the time to order before they disappear for good. The Model S launched way back in 2021, followed by the Model X in 2015. While they were revolutionary at the time, they have become a tiny part of the business. Today, the much cheaper Model 3 and Model Y account for a staggering 97% of all Tesla sales.
So, what happens to the massive factory in Fremont, California? Musk plans to gut the old car production lines and replace them with a high-tech robot facility. He wants the factory to produce one million Optimus humanoid robots every single year.
This is a massive pivot for a company that just reported its first-ever annual drop in revenue. Sales have struggled over the past year as more competitors enter the electric vehicle market and high prices turn buyers away. Musk is clearly trying to shift the focus away from slumping car sales and toward a futuristic vision of robots and self-driving tech.
Tesla aims to turn Optimus into an intelligent assistant that can do anything from heavy factory labor to babysitting your kids. The company expects to reveal the third generation of the robot later this quarter, calling it the first version actually designed for mass production.
Musk warned that building these robots is a completely different beast than building cars. Optimus requires a totally new supply chain, meaning Tesla cannot simply reuse parts from its vehicles. Even so, he expects to hire more people at the Fremont plant to significantly boost output. It is a huge gamble, but Musk is betting the company’s future on robots rather than the luxury cars that started it all.
