Tesla announced during its Q4 2025 earnings call that it will discontinue production of its flagship Model S sedan and Model X SUV by mid-2026. Production will begin winding down in the next quarter, with Elon Musk describing the move as giving the vehicles an “honorable discharge.”

Customers interested in purchasing these models are encouraged to act quickly. The decision frees up capacity at Tesla’s Fremont factory, which will be reconfigured to ramp up production of the Optimus humanoid robot. Tesla aims to eventually manufacture up to 1 million units annually, reflecting its pivot toward autonomy, robotics, and AI-driven technologies.

Despite softer demand for vehicles and Tesla’s first annual revenue decline of about 3% in 2025, the company reported strong growth in energy storage and services, with record deployments and improved margins in Q4. Tesla delivered approximately 1.66 million vehicles during the year. Musk emphasized that Tesla’s future lies in transportation-as-a-service, robo-taxis, and robotics rather than expanding traditional car ownership.

Investors reacted positively, with shares rising in after-hours trading on optimism around AI investments, including a $2 billion stake in XAI and over $20 billion in planned capital spending. Tesla sees this strategic realignment as positioning the company for the next era of growth in EVs, clean energy, and physical AI.

FAQ
When will Tesla stop producing the Model S and X? By mid-2026, with production winding down starting next quarter.
What will replace production at Fremont? The Optimus humanoid robot.
How many vehicles did Tesla deliver in 2025? Around 1.66 million.
Did Tesla’s revenue grow in 2025? No, it declined by about 3%.
What is Tesla’s long-term vision? AI-driven autonomy, robo-taxis, and robotics.

Chronogram

0:02–0:06: Breaking update introduction
0:06–0:22: Announcement of Model S and X discontinuation
0:24–0:53: Fremont factory reconfiguration for Optimus robot
1:14–1:24: 2025 vehicle deliveries and revenue decline
1:27–1:34: Growth in energy storage and services
1:37–1:47: Elon Musk’s vision for autonomy and robotics
1:49–2:02: Stock reaction and AI investments
2:05–2:12: Strategic realignment for future growth
2:15–2:19: Closing remarks

Tesla, Model S, Model X, Fremont factory, Optimus robot, autonomy, AI, robo-taxis, energy storage, vehicle deliveries

#Tesla #AI #Autonomy #ElectricVehicles #FleetMobilityToday