Tesla to Discontinue Model S/X by 2026, Shift Focus to High-Volume Models and Robotics

Tesla will officially discontinue its flagship Model S and Model X in late Q2 2026, ending a 14-year production cycle. The original production lines at its Fremont, California factory will be converted into a manufacturing base for the Optimus humanoid robot, with an annual planned capacity of one million units. In China, both models are already in the final stages of inventory clearance; customization services have been terminated, and while minor price reductions are offered, there are no significant discounts. This discontinuation stems from Tesla’s challenging financial reality in 2025: a 3% decline in revenue, a 46% plunge in net profit, and an 8.6% drop in deliveries. In China, Tesla’s product lineup will shrink to just two models, as the company voluntarily exits the premium all-electric vehicle segment priced above RMB 500,000, creating space for domestic brands. Although Model S and Model X sales had long become marginal, this move primarily aims to eliminate underperforming capacity. More importantly, it signals Tesla’s strategic shift toward Model 3/Y, Full Self-Driving (FSD), and robotics—reflecting its “efficiency-first” approach and adherence to first-principles thinking. However, with uncertain commercial prospects for autonomous driving and robotics, the contraction of its core automotive business could strain cash flow, leaving Tesla’s transformation facing multiple challenges.