Overview
- Musk said production of Model S and Model X will stop next quarter as the Fremont factory is reassigned to Optimus manufacturing.
- Tesla will keep taking orders while inventory lasts and will continue service and maintenance support for current owners.
- The new Fremont line is targeting eventual capacity of up to one million Optimus units per year, with a third-generation model planned for reveal this quarter.
- The change follows a sales mix led by Model 3 and Model Y in 2025 and a 3% drop in annual revenue to $94.8 billion, with net income down 26% and capital spending planned at more than $20 billion this year.
- Observers question Optimus’s technical readiness and Musk’s timelines, as Tesla funds AI efforts including a reported $2 billion investment in xAI and Musk flags strong Chinese competition in humanoid robots.