Elon Musk says Tesla will discontinue Model S and Model X as Fremont plant is repurposed for Optimus robots
Elon Musk announced Tesla will end Model S and Model X production by the end of Q2 2026, repurposing the Fremont plant to manufacture Optimus humanoid robots as the company pivots toward autonomy and robotics.
- Production shift: Tesla will wind down Model S and Model X next quarter and stop manufacturing both lines by end of Q2 2026 — reported by Fox Business and Electrek.
- Strategic pivot: Fremont will be retooled to build Optimus humanoid robots as Tesla expands lines for vehicles, robots, energy storage and batteries (Fox Business).
- Small sales share: Model S and X made up under 3% of Tesla’s 2025 deliveries (~30,000 units), down more than 30% year-over-year (Edmunds, Electrek).
Why Tesla is ending Model S and Model X production
On its Q4 2025 earnings call, Musk said it was “time to basically bring the Model S and X programs to an end with an honorable discharge,” and urged interested buyers that “now would be the time to order it.” The decision follows years of declining demand for these premium lines, which once defined Tesla’s flagship status. Reporting and commentary appear in Fox Business, Electrek, and Edmunds.
“Time to basically bring the Model S and X programs to an end with an honorable discharge.” — Elon Musk (Q4 2025 earnings call)
Fremont factory repurposed for robots and new lines
Tesla plans to retool its Fremont, California, facility to support multiple new initiatives, including production of the Optimus humanoid robot. Company statements and reporting indicate Tesla expects to ramp production lines across vehicles, robots, energy storage and battery manufacturing in 2026 (Fox Business, Electrek).
Some reports cite ambitious targets — as high as up to 1 million Optimus units per year on repurposed lines — a scale experts call extremely aggressive and requiring major supply-chain and labor changes.
Manufacturing feasibility and expert concerns
Manufacturing analysts warn that converting a vehicle assembly line into a high-volume robot line is complex and costly. Necessary changes include:
- New tooling and test tracks
- Different quality control systems and certification
- Worker retraining and redesigned assembly workflows
Tesla has converted parts of its footprint before to add battery and energy products, but mass-producing humanoid robots at scale is a new industrial category without clear precedents (Electrek).
Financial and market backdrop
Tesla reported Q4 2025 revenue of $24.9 billion, down 3% year-over-year, and full-year 2025 revenue of $94.8 billion, also down 3%. EV sales fell 16% in the last quarter, and total vehicle deliveries in 2025 were 1.64 million, a 9% decline (Fox Business).
Tesla frames Optimus and autonomy as a bet on higher-margin future products, while critics note the current Model S and Model X already include Level 2 driver-assist features and question whether discontinuing premium lines advances full self-driving capabilities (Electrek).
Sales decline and the premium market
Industry data show the combined Model S and Model X deliveries were under 3% of Tesla’s total in 2025, with estimated deliveries around 30,000 units — more than a 30% decline year-over-year. Contributing factors include competition, high price points, and buyer preference shifts toward lower-priced models (Edmunds, Electrek).
Historical context
The Model S (launched 2012) and Model X (introduced 2015) were central to Tesla’s early brand and helped shift public perception of EVs by combining range, performance and luxury. Later mass-market models — Model 3 and Model Y — drove volume growth while S and X became lower-volume, premium offerings (Fox Business).
Questions and risks behind the pivot
- Production feasibility: Targets like 1 million Optimus units annually are viewed as aspirational and would demand major new supply chains for motors, sensors and semiconductors (Electrek).
- Local job impacts: Retooling changes job mixes — some roles may disappear while others (robotics engineers, technicians) could grow, requiring workforce retraining.
- Market acceptance: Mass-market humanoid robots remain unproven; Tesla’s third-generation Optimus design is billed as the first meant for mass production, but adoption is uncertain (Fox Business).
Implications for San Diego, California
Economic impact
San Diego’s economy — tied to regional tech and manufacturing supply chains — could see ripple effects. Suppliers of vehicle electronics, battery components, or industrial robotics may gain new opportunities or face disruption if parts demand shifts. Local robotics expertise, semiconductor firms and defense contractors could find partnership chances, but competition will be steep.
Jobs and workforce
Retooling in Fremont may increase demand for robotics engineers, technicians and software developers in the region. Community colleges and universities might see higher enrollment in automation training. Conversely, some blue-collar assembly roles could shrink if automation increases, underscoring the need for retraining programs.
Transportation and consumer markets
Fewer new Model S and Model X units may affect used-car supply and pricing in local markets. San Diego owners may notice changes in parts availability or service timelines depending on Tesla’s inventory and support strategy. Independent repair shops and fleet operators should monitor parts supply trends.
Political and regulatory consequences
Local leaders may consider incentives, workforce grants or partnerships with educational institutions to capture tech investment. Shifts in employment or supply chains could become topics for regional economic planning and labor policy discussions.
Social and cultural effects
The phase-out of Model S and Model X marks an end of an era for California EV enthusiasts. The pivot toward robotics aligns with San Diego’s tech identity and research clusters in robotics, AI and defense.
Practical applications for residents
- Job seekers: Monitor listings in robotics, automation and software across regional job boards and university career pages.
- Small businesses: Suppliers and repair shops should assess inventories and supplier relationships to prepare for changing demand.
- Consumers: Prospective buyers of a new Model S or Model X should consider ordering soon; used-car shoppers may see shifting prices and availability (Fox Business, Electrek, Edmunds).
Reporting and next steps
Tesla plans to unveil a third-generation Optimus design this quarter and continue investing across multiple production lines. Local officials, analysts and suppliers will watch Fremont’s retooling for timelines, job impacts and supply-chain shifts.
Primary reporting sources: Fox Business, Electrek, Edmunds.
