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Tesla will discontinue two of its electric vehicle models and instead focus on the production of its upcoming Optimus humanoid robot, in the clearest sign that Elon Musk’s company is shifting gears and pulling away from the EV business.
The billionaire said in an earnings call on Wednesday that it would discontinue production of its Model X SUV and Model S full-size sedan.
“It’s time to basically bring the Model S and X programs to an end,” Musk said. “We expect to wind down S and X production next quarter.”
Humanoid robots have accelerated thanks to the development of physical artificial intelligence (AI). Tesla also said earlier this month it willinvest $2 billion (€1.6 billion) into xAI, Musk’s AI company.
Optimus has been years in the making and Musk has said the robot would be the “biggest product of all time”.
While it may appear that electric vehicles are taking a back seat, this is not the case, argues Dan Coatsworth, head of markets at the investment platform AJ Bell.
“Tesla still needs this part of its business to tick over smoothly as it helps fund Musk’s robot vision, which is getting bigger by the day,” he said.
Last week at the Davos conference, he said that his could raise living standards globally, including eliminating poverty.
“If you have ubiquitous AI that is essentially free or close to it and ubiquitous robotics, you will have an explosion in the global economy that is truly beyond all precedent,” he said.
Tesla announced that it would begin production of Optimus before the end of 2026. Musk has said the robot will be for sale to the public in 2027. However, the release date for the robot has previously varied.
Optimus was designed to be used in Tesla factories and on production lines. It weighs about 56 kg and is about 170 cm tall. Musk has previously said his aim is for the robot to be mass-produced and cost less than $20,000 (€18,000) each.