Tesla stops production of Model S and Model X

Once the vehicles that brought Tesla global leadership in the EV market are now about to become history. Musk hinted that electric vehicle sales may not remain the company’s core business in the future, and self-driving vehicles and AI-based technologies will become the company’s primary focus.

He claimed that the two-seater, steering- and pedal-free autonomous car, the ‘CyberCab,’ will eventually outsell all Tesla vehicles combined several times over. However, reality shows that Tesla’s Robotaxi service is still in a testing phase, and human operators are present for safety monitoring.

Financially, Tesla is under pressure. In Q4 2025, the company’s consolidated revenue fell by 16%, net profit decreased by 61%, and total annual profit dropped by 46%, approximately $3.3 billion. This marks the largest annual decline in Tesla’s history.

Experts note that Elon Musk’s political activities and controversial stances have damaged Tesla’s brand image in the US and Europe. Reduced government tax incentives and competition from Chinese manufacturer BYD have also affected Tesla’s market share.

The combined global sales of Model S and X accounted for only 3% of Tesla’s total, so ceasing production is unlikely to significantly impact overall sales. Production may cease entirely by the next quarter.

Tesla has also announced a $2 billion investment in Musk-owned AI company xAI. Following this news, Tesla shares rose, although investors remain cautious about the company’s real earnings and technological capabilities. Tesla plans to expand its Robotaxi service to seven more markets in the first half of this year. Musk stated that, if regulatory approval is obtained, fully autonomous vehicles could operate across much of the US by the end of 2026.