Tesla Model X discontinued as Elon Musk shuts down Flagship EV to make way for Robots
Tesla Model X and Model S. Image Credit: Tesla/X
Tesla has officially ended production of the Model X, one of the electric automaker’s most recognizable and premium vehicles, marking a major strategic shift as CEO Elon Musk pivots the company away from traditional electric cars toward robotics, artificial intelligence, and autonomous technology.
The announcement came during Tesla’s latest earnings call, where Musk confirmed that both the Model X SUV and Model S sedan will be phased out by next quarter, freeing up factory space at Tesla’s Fremont, California plant for the production of its humanoid Optimus robot.
The decision underscores a turning point for Tesla, a company that once defined the global electric vehicle revolution, as it faces declining sales, shrinking profits, and rising competition, particularly from Chinese automaker BYD.
Why Tesla Is Ending Model X Production
Introduced as a luxury electric SUV, the Tesla Model X helped establish Tesla’s premium brand identity, but in recent years it has become a small part of the company’s overall business.
According to Tesla, the Model X and Model S together account for just 3% of global vehicle deliveries, limiting the financial impact of discontinuing the models. Musk described the move as necessary to focus on what he calls Tesla’s next evolution, becoming a “physical AI company.”
The Fremont factory that once produced the Model X will now be retooled to manufacture Optimus, Tesla’s humanoid robot that Musk claims could become the company’s most valuable product.
Falling Profits and Slumping EV Sales
Tesla’s pivot away from the Model X comes as the company struggles financially. In its latest earnings report, Tesla disclosed that:
- Adjusted income fell 16% in the final quarter of 2025
- Net income plunged 61% for the quarter and 46% for the year
- Annual profits are now just 30% of their 2022 peak
Tesla also posted its largest year-over-year sales decline ever, ending a decade-long growth streak that once saw deliveries rising nearly 50% annually.
The company’s brand has faced headwinds as well, including backlash tied to Musk’s political activity and the removal of the $7,500 U.S. EV tax credit, which dampened consumer demand across the electric vehicle market.
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Competition and the End of Tesla’s EV Dominance
Tesla is no longer the world’s largest electric vehicle maker. In 2025, China’s BYD overtook Tesla, offering cheaper models that gained traction in Europe and Asia.
Interest in Tesla’s newer products has also faltered. Sales of the Cybertruck dropped 48% last year, despite Musk calling it the company’s best vehicle ever.
As competition intensifies, Tesla is increasingly betting that AI, robotics, and autonomous vehicles, not traditional EVs like the Model X, will drive its future growth.
Robots, Robotaxis, and Tesla’s New Vision
Musk has repeatedly said that Tesla’s future lies in Optimus robots and robotaxis, even though both technologies remain largely unproven at scale.
Tesla plans to:
- Begin Optimus robot production before the end of 2026
- Sell the robots to consumers starting in 2027
- Expand its robotaxi service to seven markets this year
The company also revealed a $2 billion investment in xAI, Musk’s artificial intelligence company, further signaling its shift away from vehicle manufacturing.
Despite ongoing regulatory hurdles and limited deployment, optimism around robots and AI helped Tesla’s stock reach a record high in December, though shares have since pulled back.
FAQ
Is Tesla discontinuing the Model X?
Yes. Tesla has announced it will end Model X production by next quarter.
Why did Tesla stop making the Model X?
Tesla is reallocating factory space to produce humanoid robots and focus on AI-driven technologies.
When will Tesla Model X production end?
Production is expected to wind down sometime in the next quarter.
Is Tesla also discontinuing the Model S?
Yes. Both the Model S and Model X are being phased out together.
Will Tesla stop making electric cars entirely?
No, but Musk has suggested EVs will become less central as Tesla prioritizes robots and autonomous vehicles.
What is Tesla building instead of the Model X?
Tesla plans to use the Fremont factory to produce the Optimus humanoid robot.
Does this mean Tesla is in trouble financially?
Tesla is facing declining profits and sales, but investors remain optimistic about its AI and robotics ambitions.
What happens to existing Model X owners?
Tesla has not announced changes to servicing or software support for existing Model X vehicles.