Tesla to kill Model S and Model X sedans in the next quarter.
Factory space in California will shift to production of Optimus robots.
Legacy EVs phased out as company emphasizes autonomy and affordable models.
Tesla will discontinue production of the Model S and Model X next quarter, phasing out its longest-running electric vehicle lines as part of a strategic shift toward robotics and self-driving technology.
Tesla Model X | Photo: TeslaCEO Elon Musk confirmed the decision during Tesla’s quarterly earnings call, adding that the Fremont, California facility currently building the two models will be converted to produce the company’s Optimus humanoid robots. Support for existing S and X owners will continue, Musk said, for the life of their vehicles.
Describing the move as an “honourable discharge,” Musk linked the decision to Tesla’s transition away from legacy EV platforms and toward autonomous systems. “We’re really moving into a future that is based on autonomy,” he said.
The Model S, introduced in 2012, was Tesla’s first clean-sheet design following the first-generation Roadster and helped establish the company as a mainstream electric vehicle manufacturer. The Model X, which arrived in 2015, added a larger SUV format and featured vertically opening rear “Falcon Wing” doors. Both vehicles received updates through 2021, but gradually became less central to Tesla’s product strategy as newer models gained market share.
The more affordable Model 3 and Model Y now account for the majority of Tesla’s sales volume. In 2019, Musk referred to the S and X lines as “niche” products, maintained in part for sentimental reasons. Since then, Tesla has consistently positioned them as low-volume offerings.
The retirement of the two models follows persistent production and demand challenges with the company’s newest vehicle, the Cybertruck. Despite early hype, Tesla has severely struggled to scale delivery volumes. Sales of S, X, and Cybertruck are currently reported together under a single category, masking the poor performance of individual models.
Increasing EV competition from Porsche, Audi, Rivian, Cadillac, BMW, Chevrolet, Kia, and Hyundai, to name a few, has taken a toll on the S and X and has also affected the 3 and Y’s reign as the go-to EVs they once were.
With the end of Model S and X production, Tesla’s passenger vehicle lineup will consist of the Model 3, Model Y, and Cybertruck. The company is also expanding its focus on artificial intelligence, self-driving software, and robotics as it reduces its reliance on traditional automotive platforms.
Source: TechCrunch
