Gary Zhou 
Key Takeaways
- Tesla ending production of flagship Model S and Model X vehicles.
- Elon Musk on Q4 2025 Earnings Call: “Time to bring the Model S and Model X programs to an end” to shift to autonomous future and Optimus.
- Fremont Factory production lines for S/X transitioning to Optimus at 1 million units per year.
- Tesla to continue servicing existing S/X but stop deliveries in Q2 2026 after inventory liquidation.
- S/X low-volume contributors to deliveries; Musk in 2019 called them “sentimental reasons” production.
- Stopped custom orders for S/X in Europe last July, signaling sunset.
- Musk: Optimus to boost US GDP through productivity gains and universal high income.
As a longtime Tesla enthusiast and EV industry analyst who’s been tracking Elon Musk’s bold visions since the early days of the Roadster, today’s news hits like a bittersweet milestone. During Tesla’s Q4 2025 earnings call on January 28, 2026, CEO Elon Musk dropped a bombshell: the iconic Model S sedan and Model X SUV—flagship vehicles that put Tesla on the map—are being retired. Production will cease by the end of Q2 2026, with factory lines repurposed for the company’s humanoid robot, Optimus. ❶ ❷ No successors announced, no fanfare refresh—just an “honorable discharge” to make way for autonomy and robotics. This isn’t just the end of two cars; it’s a seismic pivot signaling Tesla’s transformation from carmaker to AI/robotics powerhouse.
In this deep dive, we’ll unpack the announcement, revisit the legendary legacy of the S and X, analyze the numbers behind their fade-out, explore Optimus’s massive potential, and offer practical advice for owners, buyers, and investors. Buckle up—this shift could redefine Tesla’s future (and yours).
The Earnings Call Bombshell: Musk’s “Honorable Discharge”
Picture this: Tesla’s Q4 2025 earnings reveal mixed results—revenue at $24.9 billion (down 3% YoY), GAAP net income at $0.8 billion—yet the real headline steals the show. Musk, ever the showman, declared:
“It is time to bring the Model S and Model X programs to an end with an honorable discharge. It’s part of our overall shift to an autonomous future.” ❷
The Fremont Factory in California, Tesla’s original heartbeat, will see its S/X lines converted to churn out 1 million Optimus robots per year. Inventory liquidation starts now, with deliveries halting in Q2 2026. Service support? Lifelong, as promised. ❶ ❸
This wasn’t a snap decision. Signals have been flashing for a year: custom orders halted in Europe last July, echoing Musk’s 2019 confession that S/X persisted “more for sentimental reasons than anything else.” ❹ They’re low-volume halo cars—premium performers but negligible to Tesla’s 1.7+ million annual deliveries since 2022. ❺
Why now? Musk ties it to “autonomy”: Full Self-Driving (FSD), Robotaxi unveilings, and Optimus as GDP needle-movers. He envisions robots enabling “universal high income” via productivity surges. ❶
The Enduring Legacy of Model S and Model X
Launched in 2012 and 2015, respectively, the Model S and X weren’t just cars—they were disruptors. The S sedan crushed the luxury segment, outselling Mercedes S-Class and BMW 7-Series combined at peaks, proving EVs could be fast, luxurious, and profitable. ❻ Plaid variants hit 1.99-second 0-60s; falcon-wing doors on the X made it a sci-fi icon.
Sales Reality Check: Heroes of the Past, Not the Volume Future
| Year | Total Tesla Deliveries | Est. S/X Contribution | % of Total |
|---|---|---|---|
| 2022 | ~1.31M | ~65K | ~5% |
| 2023 | ~1.81M | ~70K | ~4% |
| 2024 | ~1.79M | ~65K | ~3.6% |
| 2025 | ~1.65M | ~60K | ~3.6% |
“Other models” (S/X/Cybertruck/Semi) hovered at 3-5%, dwarfed by Model 3/Y’s 95% dominance. In Q4 2025 alone: 418K deliveries, S/X a rounding error. ❾ They shone as flagships—tech showcases for FSD beta testers—but margins couldn’t justify low-volume tooling amid scaling Cybertrucks and Robotaxis.
My Take: Ending them feels right strategically. Tesla’s never been sentimental about profits; remember the Roadster’s quiet exit? S/X buyers got pioneering thrills—Ludicrous Mode, over-the-air updates—but mass-market 3/Y stole the show.
Optimus: The 1 Million-Unit Factory Gamble
Fremont’s transformation is audacious. Those S/X lines? Now a robotics forge for Optimus, Tesla’s bipedal helper bot unveiled in 2021. Musk projects it as bigger than cars: folding shirts, factory work, home chores—scaling to billions in value. ❶
- Timeline: Low-volume pilots in 2025 missed 5K goals, but 2026 ramps to millions via Fremont. ❿
- CapEx Surge: $20B+ in 2026 for batteries, AI, Optimus lines. ⓫
- Economic Vision: Boosts US GDP via labor augmentation—Musk’s “abundance” mantra.
Risks? Robotics is nascent; competitors like Figure AI lurk. But Tesla’s AI edge (from Dojo supercomputers, FSD data) positions it well. If Optimus hits 1M/year, that’s $10B+ revenue at $20K/unit—eclipsing S/X forever.
Fremont’s Pivotal Role
This Bay Area hub birthed Tesla’s empire. Retooling avoids layoffs (per city statements), but expect hiring sprees for robotics engineers. ⓬ No job losses signal smart execution.
What This Means for You: Owners, Buyers, Investors
Current Owners
- Service: Guaranteed—Tesla’s Supercharger/FSD ecosystem endures. ⓭
- Resale: Values may dip post-EOL, but Plaid rarity could premium them as collectibles. Advice: Enjoy the drive; FSD updates keep them future-proof.
- Trade-In: Act fast—new inventory clears Q2.
Prospective Buyers
- Buy Now? If falcon doors or 1,020HP seduce, grab inventory at discounts. Post-Q2? Used market only.
- Alternatives: Cybertruck for trucks, 3/Y for efficiency, Robotaxi unveil (Aug 2026?) for ridesharing.
- Wait for Refresh? Unlikely—Musk killed rumors.
Investors & Stock Watchers
TSLA dipped post-earnings but could rocket on Optimus hype. 2026: “Very big CapEx year,” per Musk. ⓮ Bull case: Robots + unsupervised FSD = trillion valuation. Bear: Delays, competition.
Pro Tip: Diversify—EVs slowing (Tesla’s 2025 sales down 8.6%), robots unproven. ❽
Tesla’s Grand Pivot: From Cars to Autonomy Empire
Musk’s masterplan crystallizes: Cars as mobility appliances, robots/AI as core. S/X sunset clears deck for Robotaxi fleets, Cybercab, Optimus armies. It’s risky—Musk’s timelines slip—but visionary. Echoes 2019: “Sentimental” holdouts yield to scale. ❹
Final Thoughts: Farewell, S and X—you birthed an industry. Hello, Optimus: Tesla’s next legend? As your guide through EV/robotics chaos, I’ll track this closely. What do you think—bold genius or overreach? Drop comments below.
