Mikkel Christensen
Tesla’s decision to discontinue two of its longest-running vehicles has surprised some investors and loyal customers.
Tesla’s decision to discontinue two of its longest-running vehicles has surprised some investors and loyal customers.
But the move reflects a broader shift in the company’s priorities rather than an exit from the electric vehicle market.
According to analysis published by The Motley Fool, Tesla will end production of the Model S and Model X as it sharpens its focus on autonomous technology and lower-cost, higher-volume vehicles.
Focus on autonomy
During a recent earnings call, CEO Elon Musk explained the direction of the company, saying, “we’re really moving into a future that is based on autonomy.”
The article notes that the Model S and Model X account for only a small fraction of Tesla’s total deliveries. In the fourth quarter, Tesla reported 12,881 deliveries under its “other models” category, compared with 323,800 deliveries of the Model 3 and Model Y.
Data cited from Kelley Blue Book showed that the S and X together made up just over 4,000 units, or about 1.2 percent of quarterly deliveries.
Shifting market demand
Sales trends have also worked against the higher-priced models. While Model 3 sales edged higher in 2025 and Model Y volumes were affected by a refresh, demand for the S and X declined significantly.
The broader EV market has increasingly favored more affordable vehicles. Other major automakers, including Ford and Stellantis, have adjusted their electric strategies amid weaker-than-expected demand for premium models.
Tesla has responded by emphasizing standard, lower-cost versions of the Model 3 and Model Y, aligning production with stronger demand segments.
Factory space repurposed
The Motley Fool article also highlighted Tesla’s capital spending plans. As part of a $20 billion investment program in 2026, the company intends to convert production space at its Fremont factory previously used for the S and X.
That space will be used to manufacture Tesla’s Optimus robot, underscoring the company’s long-term push into automation and artificial intelligence.
While the Model S and Model X helped establish Tesla as a premium EV brand, their limited sales volumes mean their departure is unlikely to materially affect overall performance.
Sources: The Motley Fool
