Tesla CEO Elon Musk announced during a January 28 earnings call that the company will halt production of the Model S and Model X vehicles this spring. The decision aims to shift focus toward autonomous vehicles and artificial intelligence initiatives. Despite being the lowest-selling Tesla models in 2025, the vehicles still outperformed several competitors.
Tesla's current lineup includes five vehicles: the Model S, Model 3, Model Y, Model X, and Cybertruck. After the discontinuation, the company will produce three models, emphasizing the Model 3 and Model Y, which dominated sales in 2025.
Sales data from Kelley Blue Book shows Model S deliveries fell 52.6% year-over-year in 2025, while Model X sales declined 34.2%. These figures made them Tesla's worst-performing electric vehicles that year, though they still outsold rivals including the Audi A6 e-tron, BMW i7, Genesis GV60, Hyundai Kona Electric, Lucid Gravity, and Mercedes-Benz EQE.
Musk explained the move during the earnings call, stating, "It's time to basically bring the Model S and X programs to an end with an honorable discharge, because we're really moving into a future that is based on autonomy." He highlighted a strategic pivot to the robotaxi and the humanoid robot Optimus, first teased in 2021 as the Tesla Bot during Tesla's AI Day.
This decision contrasts with other automakers' discontinuations, such as the Chevrolet Bolt EV in late 2023 due to safety concerns and Ford's F-150 Lightning amid production costs and changing EV demand. Tesla also plans to invest $2 billion in xAI, the developer of the Grok chatbot and a competitor to OpenAI.
The announcement underscores Tesla's emphasis on efficiency and innovation in autonomy and AI, even as the Model S and X maintain relevance in the broader EV market.