Elon Musk's EV company, Tesla, will now focus on the production of humanoid robots instead of cars. The company is going to stop the production of the Model S and Model X from the second quarter of 2026. Elon Musk stated that this decision was made after the earnings report for the fourth quarter of 2025. He said that the time has come to discontinue both models. Tesla launched the Model S in 2012 and the Model X in 2015.

Declining Demand for Tesla Cars
Sales of Tesla's Model S and X electric cars have been declining for years. In 2025, global sales fell to approximately 30,000 units. The company's Fremont factory has a capacity of 100,000 units per year. These two cars are facing tough competition from their new rivals, the Lucid Air and the Rivian R1S. Although the company upgraded both cars in 2025, the increasing prices made Tesla cars less appealing to customers.

Robots to be Manufactured at the Fremont Factory
The Fremont factory will no longer produce these cars. The company will prepare it for its advanced manufacturing project. It is possible that production of Tesla's humanoid robot, Optimus, will begin there. It seems that the company is focusing on future technology rather than older models.

Tesla's Bet on Optimus
The company has been working on Optimus for a long time. It has been a priority for them. Tesla is working to start production of this humanoid robot by the end of 2026 so that sales can begin by 2027. Musk believes that Optimus will be his company's most important product, which will also feature XAI's AI capabilities.

The Future of Tesla
This move indicates that Tesla, as an EV company, has achieved its goal. People around the world are buying electric cars. Musk also says he has nothing new to add to Tesla's cars, and therefore doesn't want to spend the company's time and money on them.

Elon Musk's focus is now elsewhere; he is concentrating on machines where everyday tasks will be performed by AI robots – humanoids. Tesla is no longer just a car company. Instead, its focus is on Optimus, AI, and autonomy. The Tesla of the future will be known as an AI and robotics company.

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