Tesla to End Model X, S Production, Convert Fremont Space for Optimus Robots,
FREMONT, Calif. — Tesla plans to end production of its Model S and Model X vehicles and convert part of its Fremont factory into a robot-manufacturing operation capable of producing up to 1 million Optimus humanoid robots per year, CEO Elon Musk said during the company’s fourth-quarter financial report.
The company will repurpose the factory space currently used for the Model S and Model X lines to produce the third generation of Optimus, which Musk said Tesla plans to unveil within the next few months.
Tesla will continue producing other vehicles at the Fremont plant, including the refreshed Model 3 and Model Y.
Tesla reported that its annual revenue fell in 2025 for the first time, with total revenue down 3% and profits falling 61% in the final three months of the year. The company has been shifting more of its focus toward artificial intelligence and robotics while facing intensifying competition in the electric vehicle market. In January, China’s BYD overtook Tesla as the world’s biggest EV maker.
Tesla also disclosed a $2 billion investment in Musk’s artificial intelligence venture, xAI, and said the company expects to significantly increase spending, with capital expenditures estimated at $20 billion.
The changes come as Tesla expands into newer businesses, including humanoid robots and robotaxis, while analysts have described the Model S and Model X as low-volume vehicles compared to the Model 3 and Model Y.
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