Tesla plans to scrap its premium S and X models and convert its California factory into an Optimus manufacturing hub, as Elon Musk refocuses on robotics and AI

Financial Times 2026-01-30

Context & Ripple Effects

Tesla’s shift turns a vehicle-production site toward Optimus, making robotics a more explicit use of its manufacturing footprint rather than a side project. It follows reports that Optimus output had remained in the hundreds, well short of Tesla’s stated production pace.

The pivot also comes after technical problems with Optimus’s hands reportedly derailed an earlier production target. That history makes factory conversion consequential, but it does not by itself resolve the robot’s commercialization challenges.

First-order effects

Tesla plans to end the Model S and Model X lines, narrowing its vehicle portfolio and redirecting the California factory’s capacity toward Optimus manufacturing.
Optimus becomes the immediate operational priority for the site, concentrating Tesla’s robotics and AI ambitions in a production asset previously used for premium vehicles.

Second-order effects

Suppliers, workers and customers tied specifically to the S and X will need to adjust to the planned wind-down, while Tesla’s manufacturing organization must develop processes suited to humanoid robots rather than cars.
The move raises the execution stakes for Optimus: dedicating factory capacity makes progress on the technical constraints reported in earlier coverage more commercially material.

Third-order effects

If Tesla can translate AI and robotics development into repeatable factory output, it would extend the company’s industrial model beyond vehicles; if it cannot, the conversion could leave it more exposed to the risks of a narrower product base.
The decision is a test of whether AI hardware companies can repurpose established manufacturing assets for embodied AI products before their performance and demand are fully proven.

The trend: Tesla’s move is part of the broader industrialization of embodied AI, in which companies are committing manufacturing capacity to robots alongside software and compute investment.

Discussion

@elonmusk Elon Musk on x
@WR4NYGov Optimus 4 will be built in Texas at much higher volume
@elonmusk Elon Musk on x
Much more coming out from @xAI. We are cooking hard on many projects.
@elonmusk Elon Musk on x
Real-time, high-quality shows and video games at scale, customized to the individual, next year. Medium to high resolution real-time video will technically happen this, but too expensive for mass market.
@jeffskoll Jeffrey Skoll on x
I wanted to say a few words about @Tesla and @elonmusk regarding their decision, announced during yesterday's earnings call, to end the production of the Model S and X in Q2 this year. From the start, I have been a giant fan, investor and supporter of Tesla. I was the happy
@tesla @tesla on x
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. Tesla wouldn't be what it is today without Model S & X and their (early) owners - thank you for your support over [ima…
@elonmusk Elon Musk on x
The Tesla Model S and Model X are amazing vehicles. Get them while still available!
@dwallacewells David Wallace-Wells on x
[image]
@hamids Hamid on x
As much as I love the $TSLA Model S & X, I would no longer recommend that anybody buy these products as they will almost certainly have horrific resale values after they are discontinued. Elon's decision to cancel the S&X is purely because of sales of these vehicles dropping
@wr4nygov Warren Redlich on x
I predicted S and X would be discontinued. Still sad to see them go. I'm a bit surprised they're building Optimus in Commiefornia.
@jasondebolt Jason DeBolt on x
I'm sad to hear that the model S and model X will be discontinued, but it makes complete sense. I ordered my Tesla model S in 2011 and took delivery in early 2013. It was a rare vehicle even in Palo Alto and Mountain View at that time. I gave many test rides to my coworkers,
@sawyermerritt Sawyer Merritt on x
By June 30, 2026, Tesla will officially discontinue the Model S and Model X. Since the Model S rolled out in 2012 and Model X in 2016, about 740,000 of them have been delivered, each one helping define an era of Tesla's and automotive history. Salute to two amazing products 🫡 [im…
@tesla_optimus @tesla_optimus on x
Model S & X will live on through me [video]
@urgo Jason Urgo on x
@Tesla As an owner of a '15 S & '22 X Plaid & had plans to buy another X in when it had AI5 this really really sucks. I hope you will reconsider as the Y & 3 are too small for me & not interested in a truck. For the first time in 11 years you're forcing me to look into other bran…
@bitcodyy @bitcodyy on x
Sunsetting S & X is capital rotation. Robotaxi and Optimus are the real products now. Vehicles become nodes. Labor becomes software. Most people still think Tesla sells cars.
@snazzylabs Quinn Nelson on x
Remember how I've been saying for years that Tesla doesn't care about the Model S/X at all? Well, yeah, I was right.
@mattlinn01 Matt Linn on x
The more I think about the S/X being cancelled... the more sad I get. The S literally is @Tesla. It's the car that announced them to the world. Tesla should have Next-Gen'd it. Put everything they have into it. Bring it back to being the technological wonder that it once [image]
@sircalebhammer Caleb Hammer on x
Please be a prank. Please be false information.
@itskyleconner Kyle Conner on x
The car that transformed an entire industry and shaped the future for electric transportation Everyone remembers their first Model S experience... sad to see it go 🍻
@garyblack00 Gary Black on x
All things considered, I expect $TSLA to rise by 2-3% tomorrow after analysts digest the positives and negatives and update their earnings models. $20B CapExp (and related margin pressures) is clearly a negative, as is discontinuation of TSLA's profitable S/X models, but
@mikekantorski Mike Kantorski on x
I really dislike the direction Tesla is headed. A vehicle you subscribe to. A vehicle you don't get to drive. A vehicle with no soul. I hope this isn't the future. Please @Rivian don't become this...
@marionawfal Mario Nawfal on x
Tesla is ending Model S and Model X production. The Fremont factory space will now build Optimus robots. The cars that funded the vision are making room for the future @elonmusk was always building toward. Tesla isn't just a car company anymore. [video]
@zacksjerryrig @zacksjerryrig on x
So @Tesla canceled TWO staple pillars of S3XY so they can focus on the robot that walks like Joe Biden? OK. 👍 I'm sure everything's fine.
@mkbhd Marques Brownlee on x
Oh Roadster is so cooked
@sawyermerritt Sawyer Merritt on x
Elon Musk: “In the future, the only vehicles we'll make are autonomous vehicles and the Roadster. We're hoping to debut the Roadster in April.”
@tashaark Tasha Keeney on x
If @Tesla has 500 robotaxis and doubles the fleet every month, it could surpass Waymo's fleet in 3-4 months. Last we saw Waymo had 3K cars total.
@sawyermerritt Sawyer Merritt on x
BREAKING: Elon Musk has announced that @Tesla is discontinuing the Model S and Model X in Q2 2026. “We are going to convert that production space to an Optimus factory. It's part of our overall shift to an autonomous future.” [image]
@niccruzpatane Nic Cruz Patane on x
Elon Musk's farewell to Model S/X Production, which will be ending in Q2 2026: “It's time to basically bring the Model S and X programs to an end with an honorable discharge. We're moving into a future that is based on autonomy. We're going to take the Model S and X production [v…
@briandstone Brian Stone on x
I do not understand this decision. While I agree the S&X are VERY dated and due for a total overhaul, discontinuing them completely is very confusing to me. Tesla will only offer the 3/Y/CT which isn't a very well rounded offering at all. The 3 & Y aren't comfortable to me and
@sawyermerritt Sawyer Merritt on x
Elon Musk on Optimus competition: “We currently don't see any competitors outside of China. Optimus will be much more capable than any robot under development in China. There's three hard things about robots: • Hands • Real-world AI • Scaling production Those are the hardest [ima…
@norbizness @norbizness on bluesky
Personally I'm ready to transition from cars on fire to robots on fire (once they actually appear in limited production in 2033)
@karlbode.com Karl Bode on bluesky
I genuinely love what's coming for these companies — that humanoid robot will never, ever be commercially mass produced and it's fifth-place racist AI chatbot is a money pit
@robertscotthorton Scott Horton on bluesky
Musk begins looting Tesla to advance his independent AI project. www.ft.com/content/78d5...
@pickardje Jim Pickard on bluesky
pass the tiny violin: — Tesla's annual revenue declined for the first time in 2025 as President Donald Trump's policies and a consumer backlash to chief executive Elon Musk's political activism weighed on its sales of electric cars. — www.ft.com/content/78d5...
@mzjacobson Mark Z. Jacobson on bluesky
Better to use the factory to produce more low-cost EVs. This plan merely exacerbates pollution & warming by slowing an energy transition — Elon Musk says Tesla ending Models S & X production, converting Fremont factory lines to make Optimus robots — www.cnbc.com/2026/01/28/t…
r/RTLpod r on reddit
Tesla is committing automotive suicide
r/RealTesla r on reddit
Elon Musk says Tesla ending Models S and X production, converting Fremont factory lines to make Optimus robots
r/cars r on reddit
Elon Musk says Tesla ending Models S and X production, converting Fremont factory lines to make Optimus robots
r/electricvehicles r on reddit
Elon Musk says Tesla ending Models S and X production, converting Fremont factory lines to make Optimus robots
r/teslainvestorsclub r on reddit
Elon Musk says Tesla ending Models S and X production, converting Fremont factory lines to make Optimus robots
r/teslamotors r on reddit
Elon Musk says Tesla ending Models S and X production, converting Fremont factory lines to make Optimus robots
r/wallstreetbets r on reddit
Elon Musk says Tesla ending Models S and X production, converting Fremont factory lines to make Optimus robots

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