Tesla Halts Model S/X Production to Focus on Autopilot and Robotics

Tesla announced it will gradually discontinue production of the Model S and Model X starting in April this year, reallocating capacity at its Fremont factory to the Optimus humanoid robot and Cybercab autonomous taxi projects. Despite receiving mid-cycle updates in mid-2023, combined sales of the two models totaled less than 30,000 units for the full year—accounting for less than 2% of Tesla’s total deliveries of 1.63 million vehicles. Sluggish product updates, declining competitiveness, and high costs associated with their dedicated production lines have driven annual capacity utilization below 30%, resulting in $500 million to $800 million in annual depreciation and maintenance expenses, plus tens of millions of dollars in warehousing costs. Against a backdrop of mounting revenue pressure and falling stock prices, the move is seen as a critical strategic shift to optimize resource allocation. Tesla plans to invest $20 billion to retool the factory, doubling down on its vision for an autonomous-driving future.