Tesla was preparing to close an important chapter in its history. The original January 2026 report described Elon Musk confirming during the Q4 2025 earnings call that Model S and Model X would be phased out, with production expected to end during the first half of 2026.
The report paraphrased Musk’s message as bringing the two programmes to an end and reallocating part of Fremont’s manufacturing resources to Optimus. That framed the decision within Tesla’s increasing emphasis on artificial intelligence, autonomous vehicles and robotics. This article records the plans discussed then, rather than an independently verified date on which the final car left the line.
A departure that had been anticipated
The two models had become smaller parts of Tesla’s business as Model 3 and Model Y attracted more of its manufacturing and commercial attention. Recent modest refreshes had not changed that balance. The original author regarded those changes as lacking major innovation; that was an editorial assessment rather than a measured account of every improvement.
Lower volumes and manufacturing costs
Model S and Model X occupied a niche relative to Tesla’s high-volume models. For Q4 2025, Tesla reported total vehicle deliveries down 16% year on year and automotive revenue down 11% to about $17.7 billion. The delivery decline was a company-wide figure, not a separately reported 16% fall for Model S and Model X. Against that background, maintaining complex lines for limited volumes raised an opportunity-cost question: how else could the factory space and engineering effort be used?
Simplifying the range was also an industrial decision
Phasing out the flagships could reduce variants and manufacturing complexity, allowing Tesla to concentrate production, supply-chain work and engineering on its core models and future programmes. The decision was therefore about the allocation of resources as well as the appeal of two individual vehicles.
Tesla’s “physical AI company” ambition
Tesla’s investor material described a transition towards a physical AI company. Releasing capacity and attention for Optimus, Robotaxi and autonomous-driving development fitted that stated direction. Musk had presented Optimus as a potentially important source of long-term value. The original article stressed the gap between those large expectations and demonstrated financial returns; it did not establish separate audited profitability figures for each emerging programme.
Iconic products were not immune
The author also pointed to Cybertruck. Industry estimates attributed to Cox Automotive suggested US sales had fallen by roughly 48% in 2025 compared with the previous year. That was a third-party estimate rather than Tesla’s separately reported model total. The suggestion that Cybertruck might eventually follow Model S and Model X was speculation in this January article, not an announcement made at that time.
A tougher global market
The original report cited Reuters reporting that BYD had overtaken Tesla in worldwide battery-electric vehicle sales during 2025. Competition from Chinese manufacturers and their European expansion added to the pressure. In a market sensitive to price, production scale and frequent updates, the author argued that long-established premium models were becoming harder to justify industrially.
The legacy of Model S and Model X
These were more than names disappearing from a price list. Model S and Model X helped demonstrate that electric vehicles could combine performance, advanced technology and desirability. Their planned phase-out symbolised a different allocation of Tesla’s priorities, with a growing emphasis on AI-based products and services. Whether that shift would fulfil its promise remained an open question, rather than something established by market enthusiasm alone.
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