Tesla to Discontinue Model S and X as Sales for Luxury EVs Shrink

Although it wasn’t the first electric vehicle (EV) Tesla produced, for many, the Model S was the first Tesla we saw on the road. Soon, though, we won’t be seeing new examples of the large sedan, as the automaker plans to pull the plug on it and the Model X.

In a fourth-quarter earnings call, Tesla CEO Elon Musk indicated that the large models are being sunset in the coming months. The executive, fond of making bold claims, said that the vehicles were being discontinued to make way for non-automotive products, but a look at sales charts paints a nuanced picture.

“It’s time to basically bring the Model S and X programs to an end with an honourable discharge because we’re really moving into a future that is based on autonomy,” Musk said, as quoted by Autonews. “We’re going to take the Model S and X production space in our Fremont [California] factory and convert that into an Optimus factory.”

Optimus is the name of the humanoid robot Tesla is working on. The automaker is one of several working on such a robot (along with Hyundai, BMW, and Mercedes-Benz) that will be able to sort items, lift boxes, and perform other manufacturing tasks currently performed by humans.

However, the goal of building robots that complete tasks currently performed by human workers is a long-term one. Much more relevantly, the Model S and X’s sales have slowed to a crawl. Together with the Cybertruck, the vehicles cumulatively account for around 3 per cent of the automaker’s sales — the more affordable Model 3 and Y accounted for the other 97 per cent of the company’s sales in 2025.

Amid the wider context of slowing vehicle sales, shrinking net income (which fell by 61 per cent last year), and a base of buyers who were alienated by Musk’s participation in the Trump administration, the discontinuation of under-performing, aging vehicles makes sense.

To combat the falling sales, Tesla is investing heavily in artificial intelligence, giving $2 billion to another Musk venture, xAI. The automaker has also made big claims about the capabilities of its upcoming Cybercab, a small vehicle that will allegedly be sold without a steering wheel or human-oriented controls. As happens frequently with Tesla, the unrealistic claims about its vehicles’ abilities obscure its controversial background in the field of automated driving. Tesla has pushed to roll out advanced driver assistance features faster than most other automakers and its vehicles’ features are involved in more investigations than other automakers. Despite that, the CEOs inflated claims continue to attract investors, buoying the company in turbulent times.