Tesla ends Model S and Model X production to focus on Cybercab

Tesla CEO Elon Musk has confirmed that custom orders for the Model S sedan and Model X SUV are over, stating that only some inventory remains. Tesla plans to build its Optimus robots at its factory in Fremont, California, once production of the Model S and Model X ends, which could be any day now. Meanwhile, Musk has stated that Tesla will begin producing the Cybercab this month at its factory in Austin, Texas.

The decision to phase out the Model S and Model X follows years of declining sales. Combined sales of the two models peaked in 2017 at 101,312 vehicles, but fell to 50,850 vehicles in 2025. This decline occurred as Tesla’s cheaper, higher-volume models took over, though the company’s overall growth has recently stalled. Tesla delivered 1.63 million vehicles globally last year, but its total sales for 2025 fell to 1.69 million vehicles, marking a second consecutive year of decline. This slowdown comes amid increased competition from China’s BYD, which took the top global EV sales spot in 2025 by delivering 2.26 million EVs. On April 2, Tesla reported first-quarter 2026 figures, delivering 358,023 EVs globally. While this represents about 6% more than the same period in 2025, it fell below analysts’ expectations of around 368,000.

As Tesla shifts its focus toward an AI-first mission, its primary vehicle project is the Cybercab, an autonomous two-seater vehicle shown as a concept in 2024. However, the Cybercab faces a major regulatory hurdle before it can ever hit the road. The vehicle is designed without a steering wheel or pedals, meaning once it launches it will be without the initial backup of a human safety operator. Tesla has not yet demonstrated that its Full Self-Driving software—Tesla’s autonomous driving software—can operate reliably at scale. Additionally, the company has no public record of applying for an exemption with the National Highway Traffic Safety Administration, the US federal regulator for vehicle safety. Tesla may find a regulatory path through Zoox, the autonomous vehicle company owned by Amazon. Zoox previously received an exemption from the US regulator to test its robotaxis on public roads. Despite these hurdles, Musk remains committed to an autonomous future. He previously stated that “The vast majority of miles traveled will be autonomous in the future,” noting that probably less than 5% of miles driven—and maybe as low as 1%—will be human-driven.

Why it matters

Tesla’s pivot from its legacy luxury sedans to an AI-first, autonomous-only strategy marks a high-stakes bet on the future of transportation, even as the company faces stalling growth and regulatory uncertainty.