CEO Elon Musk said production of these two luxury models is expected to end in the second quarter.
Tesla CEO Elon Musk said on Jan. 28 that the electric vehicle manufacturer will sunset production of its Model X and Model S vehicles and retool the company’s factory in Fremont, California, to begin producing Optimus humanoid robots.
Tesla introduced the Model S full-size sedan in the summer of 2012 and the Model X crossover sport utility vehicle (SUV) in September 2015. During a conference call to discuss the company’s fourth-quarter and full-year 2025 financial results, Musk said the company will make big investments in 2026 to produce Optimus robots at scale.
“This is going to be a very big capex [capital expenditure] year,” Musk said. “That is deliberate because we are making big investments for an epic future.
“These [investments] will make a ton of strategic sense,” he added.
Tesla CFO Vaibhav Taneja said during the conference call the company would likely invest as much as $20 billion in capital expenditures in 2026 as it enhances its capabilities in artificial intelligence (AI), new factories, and the Optimus robot.
Musk added that the time had come for Tesla to wind down production of its Model S and X programs. The luxury Model S has a starting price of about $95,000, while the Model X starts at just under $100,000. Late last year, Tesla introduced more affordable versions of its Model 3 and Model Y SUV and Model 3 sedan. A standard Model Y starts around $40,000, while the base-level Model 3 costs about $37,000.
Tesla delivered 406,585 Model 3 and Model Y vehicles in the fourth quarter of 2025, a decline of 14 percent from the same quarter in 2024. It delivered just more than 11,600 Model S, X, and Cybertruck vehicles in the same period, a 51 percent drop from the fourth quarter of 2024.
Production of the company’s more expensive electric vehicles is expected to end in the second quarter, Musk said.
“We will continue to support the Model S and X programs as long as people continue to have the vehicles,” he said.
“But we are going to take the production space in our Fremont factory and convert that into an Optimus factory with the long-term goal of having a million units a year of Optimus robots in the current X, S space in Fremont.”
By Rob Sabo
