Tesla to discontinue Model S, X cars as priorities shift towards robotics

Tesla has informed investors that it would discontinue production of its Model X SUV and Model S full-size sedan models amid the company's shift in priorities.

CEO Elon Musk has announced those changes during a call with shareholders on January 28, Caliber.Az reports citing US media.

The model S and X factory in the US state of California would be converted to produce Tesla’s upcoming Optimus robot, Musk said, reflecting the company's pivot away from its traditional electric vehicle focus towards robotics.

The drastic change comes as Tesla’s most recent quarterly earnings showed slumping vehicle sales and declining revenue. The earnings report described Tesla’s chaotic year as a “transition from a hardware-centric business to a physical AI company”. 

The company’s total automotive revenues dropped 11% from the previous year, while Tesla reported its fourth quarter vehicle delivery numbers (the sales levels to buyers rather than to dealerships), incurring a 16% decline year-over-year

Musk's company has also been facing increasing competition from other electric vehicles companies, primarily China’s BYD, which overtook Tesla last year as the world’s largest electric carmaker. BYD’s sales grew by 28% in 2025 with its less expensive alternatives to Tesla’s models.

The billionaire CEO has told investors that the company would be shifting towards AI-driven projects such as Optimus consumer robots and self-driving Robotaxis. He forecasts that Optimus would be the “biggest product of all time” and said that the robots, along with autonomous vehicles, would usher in “a world where there is no poverty”.

By Nazrin Sadigova