Tesla Makes Big Changes to Focus on Autonomous Future
Tesla is changing direction and fazing out some of its vehicle models to make space for robots in its production facilities.
Quick overview
- Tesla will discontinue the Model X SUV and Model S sedan by mid-year to focus on robotics.
- CEO Elon Musk emphasizes a shift towards an autonomous future, moving factory space from vehicles to robot production.
- Tesla's stock fell 2.62% following a disappointing earnings report, with a 3% drop in revenue compared to last year.
- The company plans to increase production of its Optimus robots as part of a strategy to adapt to declining interest in electric vehicles.
Tesla (TSLA) will stop making the Model X SUV and Model S sedan electric vehicles by the middle of the year, according to CEO Elon Musk, and they are turning their focus to robots.
On Wednesday, Musk said the future is autonomous machines for Tesla, and the company is attempting to become more than just a car business. They are discontinuing two of their EVs and taking the factory space allocated for those vehicles and using them to build robots.
Tesla announced plans last year to move forward with their Optimus robots, and now they are condensing their lineup of Tesla vehicles and shifting to what Musk calls “an autonomous future.”
Tesla Stock Reacts to Earnings Report
The price of Tesla stock moved down 2.62% on Thursday after the company released a disappointing earnings statement on Wednesday. Tesla reported $24.9 billion in revenue for the fourth fiscal quarter, and that was a drop of 3% from the same time last year. The decrease is due to diminishing EV sales across the world, and that is not just for Tesla. Many of their competitors felt the squeeze of waning interest in EVs as well as the dropped tax incentive for buying a new EV.
The company also experienced smaller profit margins in 2025, leading to decreased net income for the quarter. Their adjusted earnings per share came in at $0.50, which was down tremendously from the previous year for the same 4th quarter.
This year, Tesla is planning to dramatically increase production on its Optimus robots, and Musk is betting that will help the company meet the sky-high sales and stock goals that have been set for him to receive a trillion dollar payout. The company also rolled out its robotaxi service last year to decent results, and these moves are part of their wider strategy to transition away from just being known as an automaker, especially in a time when interest in electric vehicles is falling around the world.
Tesla stock is down 3.8% for the year so far and about 3.9% above where it was at the same time last year. 2025 was a tough year for the company, and they have a lot of work to get back to the kind of profits they enjoyed in 2023 and 2024.
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