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

During Tesla's Q4 2025 earnings call, CEO Elon Musk confirmed that production of the Model S and Model X will be fully discontinued by the end of Q2 2026. These premium models have become unprofitable due to persistently declining sales—global deliveries in 2025 totaled only 51,000 units, a 40% year-over-year drop—low production utilization, and difficulty in spreading fixed costs. Additionally, their underlying platform hasn't been updated in years, leaving them technologically uncompetitive. Tesla is now reallocating resources toward the Model 3 and Model Y, as well as its "technology narrative" areas such as AI, the Optimus robot, and autonomous driving. Following the announcement, Tesla’s stock rose more than 4.2%, adding over $60 billion to its market capitalization, reflecting investor confidence in the company’s strategic pivot.