Tesla CEO Elon Musk has confirmed that production of the flagship Model S and Model X will end in the second quarter of 2026, marking a major shift in strategy toward autonomous vehicles and robotics.
Tesla Inc. has confirmed that it will discontinue production of its long-running Model S sedan and Model X SUV by the second quarter of 2026, signalling a major strategic pivot for the electric vehicle maker once known for pioneering premium EVs. The announcement was made public following comments from CEO Elon Musk during a recent earnings call and has been reposted on Tesla’s official social media accounts.
The Model S, first launched in 2012, and the Model X, introduced in 2015, helped establish Tesla’s reputation as a maker of high-end electric vehicles but have seen declining sales in recent years compared with more affordable models like the Model 3 and Model Y, which now account for the bulk of the company’s global deliveries.
Tesla said the phased discontinuation will take place during the second quarter of 2026, with production winding down even as support and service continue for existing owners.
Musk and company executives have framed the move as part of a broader transformation of Tesla’s business model, aiming to prioritise autonomous driving technology, robotics and artificial intelligence over traditional consumer vehicle segments. The automaker plans to repurpose production facilities, particularly at the Fremont, California factory, to support development and future manufacturing of the Optimus humanoid robot and a fully autonomous, steerless “Cybercab” robotaxi concept expected to enter production later in 2026.
In addition to reallocating factory capacity, Tesla has announced plans for an expanded capital programme this year, with over $20 billion earmarked for investment in autonomous vehicle development, humanoid robots, and next-generation technologies including battery production and lithium refining.
Industry analysts view the discontinuation as a symbolic end to Tesla’s first era of electric vehicle leadership — one defined by high-end EV models — even as the company continues to sell its lower-cost and more volume-oriented Model 3 and Model Y. Musk has described the decision as “slightly sad” but necessary to push into what he calls the future of autonomy.
The shift comes amid broader challenges for Tesla’s automotive business. The company reported a decline in overall EV sales leadership in 2025 and faces intensifying competition from rivals including Chinese brands and established automakers across both premium and mainstream segments. At the same time, Tesla’s valuation remains tied not just to its EV business but to investor belief in its broader technology and AI ambitions.
While Tesla has historically been synonymous with electric vehicles, the discontinuation of two of its most iconic cars signals a turning point in how the company views its future. Existing owners of the Model S and Model X can continue to access support and parts, but new purchases of these models will cease as part of the transition.
Suhail Gulati
Suhail Gulati is the founder of ElecTree and an economist by training. He holds a Master's degree in Economics from the Delhi School of Economics and has worked in credit, retail banking, and financial stress testing at Barclays and American Express. He founded ElecTree in 2023 — building it into India's dedicated platform for 4-wheeler EV data, sales analysis, and original reporting. His work sits at the intersection of economic analysis and electric mobility — bringing a banker's rigour to a sector that deserves it.