Tesla plans to discontinue production of the Model S sedan and Model X SUV, as announced by CEO Elon Musk during the company’s recent earnings call. The decision reflects a strategic pivot toward fully autonomous vehicles and the prioritization of more popular models like the Model 3 and Model Y.
Declining Sales and Shifting Priorities
Sales of the Model S and Model X have been steadily declining. In the final quarter of 2025, Tesla reported only 11,642 sales across its premium models (including the Cybertruck and Semi), marking a 51% decrease year-over-year. This decline, combined with Tesla’s focus on mass-market vehicles, has led to a natural phasing out of these higher-end options.
The Autonomous Transition
Tesla’s long-term vision centers on a fully autonomous fleet. Musk indicated that production lines previously dedicated to the Model S and Model X will be repurposed for the Optimus humanoid robot. The company’s future vehicle lineup will largely consist of autonomous vehicles, with the exception of the next-generation Roadster.
Impact on Tesla’s Lineup
The discontinuation of the Model S and Model X leaves a gap in Tesla’s offerings. The Model 3 and Model Y cater to the compact sedan and SUV markets, while the Model S provided a larger family sedan option, and the Model X was Tesla’s most luxurious SUV. Potential buyers seeking a spacious or premium Tesla vehicle will now have limited choices, with the Cybertruck being the most notable alternative. However, Cybertruck sales have been low.
Future Outlook
Tesla is betting on the success of its self-driving Robotaxi and the eventual release of the new Roadster in 2027. The shift away from traditional vehicle production signals a clear commitment to autonomous technology and robotics.
“The only vehicles that we’ll make will be autonomous vehicles, with the exception of the next generation Roadster,” Musk stated.
This transition marks a significant turning point for Tesla, as it moves away from consumer-focused car manufacturing and toward a future dominated by autonomous solutions and advanced robotics.
