Musk noted that production of the Model S sedan and Model X crossover in California will be halted as early as the next quarter. The freed-up space at the Fremont factory will be repurposed for the production of humanoid robots, Optimus.
“It’s time to honorably conclude the production of Model S and Model X as we move into a future based on autonomy,” Musk stated while addressing investors.
“We will continue to support S and X owners throughout their usage, but the production capacity of our Fremont factory will be transformed to create Optimus robots with the ambitious goal of producing 1 million units per year.”
The Model S, introduced in 2012, radically changed the perception of electric vehicles: it was not just a city car, but a luxury sedan with supercar characteristics that could outrun the BMW M5 and even some hypercars. Along with the Nissan Leaf, it helped electric vehicles enter the mainstream.
The Model X, which appeared later, was remembered for its unique "falcon wing" doors and spacious interior, although its cultural impact was less noticeable than that of the Model S.
However, over time, sales of the S and X began to decline amid the rapid rise in popularity of the Model 3 and Model Y. Tesla conducted updates to its flagships but never introduced entirely new generations, despite increasing competition from both Western and Chinese manufacturers.
Instead of updating its models, Tesla decided to radically change its direction: from passenger cars to the development of humanoid robots, which Musk believes can bring the company significantly more profit and have a more substantial impact on society.
The Fremont factory will become the main center for the production of Optimus robots—a project that Musk identifies as one of the key priorities for the company in the coming years.
