Elon Musk announced on Wednesday that Tesla will halt production of the Model X and Model S, two of their most popular models, to focus on the “autonomous future.”
The announcement was made as part of the Q4 2025 Shareholders' update, during which the company reported its quarterly earnings and plans for 2026.
“As we shift to an autonomous future, Model S & X production will wind down next quarter. If you’d like to own one of them, now’s a good time to place your order,” the company said in a statement.
“Tesla wouldn’t be what it is today without Model S & X and their (early) owners – thank you for your support over the last decade,” it added.
This comes as Tesla posted an 11% year-over-year drop in total revenue, from $19 billion in Q4 2024 to $17 billion in Q4 2025, while it reported increases in revenue from energy generation and storage and other services, with a $1.1 billion gross profit in the energy sector.
It also reported a 39% increase in operating expenses, largely in line with its goal of transitioning from a primarily automotive and hardware manufacturer to what it calls “a physical AI company.”
Robots, AI in Tesla’s future
Tesla is now aiming for new markets beyond its autonomous electric cars, battery systems, energy production, and related services, with robotics as its main focus, according to its quarterly report.
“We laid the foundation for the future of Tesla by further advancing FSD Supervised, launching our Robotaxi service, beginning to install production lines for Cybercab, and fine-tuned our production-primed Optimus design while expanding our AI training infrastructure,” read their release for Q4.
“In 2026, we will further invest in the infrastructure needed to support clean energy and
transport and autonomous robots, including the ramp of six new production lines across
vehicle, robots, energy storage, and battery manufacturing, while further leveraging our existing
factory, charging, and service center footprint to support future growth,” they added.
According to a report brief published in X, the roadmap includes the official release of Optimus Gen 3, the third-generation humanoid autonomous robot developed by Tesla, and the first intended for mass production.
With a starting date in 2026, the objective is to have a total capacity of one million robots per year, according to their estimates.
The other main pillar appears to be AI processing capacity, with the primary objective of doubling the computing power currently available at the Tesla Texas Giga factory while continuing to improve its self-driving software.
Finally, their other main production goal for 2026 will be to gain further approval for their “Robo-taxi” service, in which self-driving vehicles operate without supervision. Alongside this, Tesla announced that it continues to expand regulatory approvals in China and Europe for its self-driving software.