The Fremont factory will still manufacture Model 3 and Y, but the space where Model S and X are made will instead focus on mass production of Tesla's Gen 3 Optimus robots.

Tesla CEO Elon Musk said the EV maker will discontinue the Model S and X, Tesla's premium sedan and SUV offerings, in the next quarter.

In its earnings report, Tesla says that the third-generation version of its Optimus humanoid robot “meant for mass production” will be unveiled in the first quarter of 2026.

Tesla’s revenue fell about 3% to roughly $94.83 billion in 2025, marking the company’s first annual decline in revenue.

CEO Elon Musk recently provided encouraging updates on Tesla's autonomous driving and humanoid robotics technology.

Tesla will discontinue the Model S and Model X in the second quarter of 2026, Elon Musk said in an earnings call with investors today. No advance word was given about the cancellations, making it an abrupt ending for Tesla’s two original flagship EVs.

Musk said on Wednesday evening that Tesla’s humanoid robot, Optimus, was still in the R&D phase. Still, the company plans to unveil the third generation of its robot in the first quarter. Tesla also plans to convert its Model S and X assembly capacity in California to a robot assembly line.

Tesla reported fourth quarter earnings that topped estimates after the bell on Wednesday. The company also said its Optimus robots were on track for an end of year start of production.

The company announced it was ending production of its higher-end Model S and Model Y, and turning that production space over to making humanoid robots.

Tesla had a poor 2025 but it's pivoting to two new and potentially massive industries. Is it worth a look for 2026?