By Blessing Nweke
Tesla will begin phasing out its Model S and Model X electric vehicles this year, ending production of two cars that helped propel the company from a Silicon Valley startup into the world’s most valuable automaker. CEO Elon Musk announced the decision Wednesday during a call with investors and Wall Street analysts, outlining a major shift toward robo taxis and humanoid robots.
“We expect to wind down S and X production next quarter and basically stop production,” Musk said, adding that Tesla would continue to service and support the vehicles for as long as customers own them. Calling the move “slightly sad,” he said it marked “our overall shift to an autonomous future.”
Introduced in 2012, the Model S arrived when electric vehicles occupied only a small niche in the global car market. Many analysts questioned whether an electric-only automaker could survive. The sleek sedan quickly won over critics and consumers, topping owner satisfaction surveys and helping push electric cars into the mainstream. The Model X, a crossover SUV launched in 2015, followed with bold design features but initially struggled with reliability issues.
Musk said Tesla will convert its Fremont, California, factory from an auto assembly plant into a manufacturing hub for its planned Optimus humanoid robots, which are still under development and not yet available for sale.
The announcement came as Tesla reported financial results for the final quarter of last year. While the company exceeded analysts’ earnings expectations, total revenue for the year fell 3% compared with 2024, reflecting broader sales challenges. Tesla’s share price rose about 2% in after-hours trading.
Vehicle sales have softened over the past year amid growing competition from Chinese and other global automakers, as well as backlash from some consumers over Musk’s involvement in right-wing politics. In 2023, Tesla cut prices for the Model S and Model X to stimulate demand, but volumes remained limited compared with its mass-market models.
The phase-out underscores a turning point for Tesla as it bets its future on autonomy and robotics rather than legacy flagship cars.
Original article
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