Tesla pivots away from cars and axes Model S and Model X

Tesla has axed the Model S and Model X as it signals a pivot away from car manufacturing and towards robotics and artificial intelligence.

In an investor call this week, Tesla's CEO Elon Musk said Model S and X production would wind down in the second quarter of 2026, amid falling sales and revenue. The American firm's most recent quarterly earnings report said 2025 was a "transition from a hardware-centric business to a physical AI company".

The Model S (pictured above) is old by automotive standards, having first been introduced in 2012. The Model X arrived in 2015. The culling of the two models leaves only the Model 3 (below) and Model Y on sale in the UK. A new car, the Tesla Roadster, is due for reveal in April.

Telsa's automotive revenue dropped by 11% year-on-year in 2025, with a 16% decline in vehicle deliveries in the fourth quarter. Interest in Tesla cars in Europe has particularly fallen in the wake of several high-profile controveries involving Musk himself. Overall revenue in Tesla fell by 3% year-on-year - the first annual decline in the company's history.

Tesla also sees its future increasingly as a robotics venture, particularly in driverless taxis and humanoid robots. The EV industry has a rising supply, particularly from Chinese carmakers like BYD, which last year overtook Tesla as the world's top seller of electric vehicles.

The ending of Model S and Model X production could boost residual values for more recent examples, particularly those with low mileage and high specs.