Tesla has announced it will cease production of its Model S and Model X in the second quarter, repurposing the Fremont factory lines for its Optimus humanoid robot. CEO Elon Musk framed the move as a strategic shift, stating it is “time to gracefully retire” the flagship sedans. The decision comes as Tesla reported its first annual revenue decline in 2025, with total revenue dropping 3% to $94.8 billion and global deliveries falling 8.6% to 1.636 million vehicles. Tesla plans to invest approximately $20 billion this year to expand AI infrastructure, scale its Robotaxi service, and build production capacity for Optimus.

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