Tesla axes Model S and X as Musk eyes robotics: Here's what we know

Tesla CEO Elon Musk, with an eye on robotics, has made a milestone move, announcing the scrapping of Tesla Models S and X amid a decline in quarter profits and sales.

During a Wednesday earnings call, Musk announced the decision to end the production of two models, the Model S and Model X.

The company is planning to use that space to manufacture humanoid robots instead, as reported by CNN.

The Model S and X factory in Fremont, California, would be converted to produce Tesla’s upcoming Optimus robot, Musk said.

Speaking at the earnings call on Wednesday, January 28, Musk said, “It is time to basically bring the Model S and X programs to an end. We expect to wind down S and X production next quarter.”

Tesla on Wednesday, January 28, stated that its adjusted income dropped to 16% during the last three months of 2025.

With the net income plummeting further, it saw a continued decline of $3.3 billion.

As of 2025, the company’s annual income only stands at 30% of the $12.6 billion as compared to 2022, the year of Tesla’s peak earnings.

Now eyeing the robotics, Musk outlined a policy shift in Tesla production, saying Optimus would be the “biggest product of all time” and the robots, along with autonomous vehicles, would usher in “a world where there is no poverty”.

Tesla is eyeing bringing the Optimus to the production line before the end of 2026, according to the earnings report, and it will be ready for public sale by 2027.

Following an earnings announcement that the company will expand its robotaxi service to seven markets within the first half of the year, Tesla shares saw a surge in after-hours trading.