What did Elon Musk announce?
Tesla CEO Elon Musk said on Wednesday that the company will begin phasing out production of its Model S and Model X electric vehicles this year. As part of the shift, a California-based factory will be retooled to manufacture humanoid robots.
Why is this considered the end of an era?
First introduced in 2012 and 2015, the Model S and Model X helped move electric vehicles from a niche product into the mainstream market. These models were central to Tesla’s transformation from a young startup into the world’s most valuable automaker.
How and when will production stop?
Speaking during a call with investors and Wall Street analysts, Musk explained that production of the Model S and Model X will begin winding down next quarter before coming to a full stop. He added that Tesla will continue to support the vehicles for as long as customers own them.
What is driving Tesla’s strategic shift?
According to Musk, ending the S and X programs is part of a broader overhaul of Tesla’s operations. The company plans to focus more heavily on robotaxis and the development of humanoid robots as it pushes toward an autonomous future.
“It is slightly sad, but it’s time to bring the S and X programs to an end. This aligns with our overall shift toward autonomy,” Musk said.
How does this relate to Tesla’s financial results?
The announcement coincided with Tesla’s release of financial results for the final quarter of last year. While the company exceeded analysts’ expectations for earnings, its total annual revenue declined by 3% compared with 2024.
Following the news, Tesla shares rose by about 2% in after-hours trading.
What challenges is Tesla facing in the market?
Over the past year, Tesla’s overall vehicle sales have weakened. Consumer response to Musk’s political involvement and increasing competition from Chinese and other global automakers have given buyers more alternatives, putting pressure on Tesla’s dominance.