In a move that signals the most significant strategic pivot in the company’s history, Tesla has announced it will cease production of the Model X and Model S by the end of the second quarter of 2026. The announcement, delivered by Elon Musk during Wednesday’s earnings call, marks an “honorable discharge” for the vehicles that turned Tesla from a niche startup into a global powerhouse.
The “Optimus” Takeover
The reason for the discontinuation is not just declining sales, but a massive reallocation of resources. Tesla plans to convert the dedicated Model X production lines at its Fremont, California facility into a high-volume manufacturing hub for Optimus, Tesla’s humanoid robot.
- The Goal: Tesla is aiming for a long-term capacity of 1 million robots per year.
- The Logic: Musk stated that Tesla is transitioning from a “hardware-centric car company” into a “physical AI company.” The factory space currently occupied by the complex Falcon Wing door assembly will soon house the production of the Optimus Gen 3, scheduled for its first major rollout later this year.
The 2026 “Final Edition” Model X
For tech enthusiasts and collectors, the 2026 Model X isn’t going out quietly. Tesla has introduced a final series of refinements for the remaining production units:
- Hardware 5.0 (AI5): The final units are expected to ship with the latest AI compute clusters, optimized for the most advanced version of “Full Self-Driving” (Supervised).
- Acoustic Overhaul: New active noise-canceling tech and upgraded suspension bushings aim to make this the quietest Model X ever made.
- The “Frost Blue” Aesthetic: A new limited-edition paint color has been added to the palette to commemorate the final production run.
Market Reaction: USA vs. China
The trending status of the Model X reflects two different market sentiments:
- In the USA: There is a rush of “sentimental buying.” Collectors and long-time fans are placing orders to secure what is essentially a piece of automotive history.
- In China: The trend is driven by intense competition. With BYD, XPENG, and Li Auto aggressively gaining market share with newer, more localized “smart SUVs,” the retirement of the Model X is seen as a tactical retreat by Tesla to focus on the next frontier—Robotaxis and AI—where Chinese rivals are also rapidly advancing.
What Happens to Current Owners?
Tesla has committed to supporting the Model X “for as long as people have the vehicles.” This includes continued software updates and parts availability, though secondary market values are expected to fluctuate wildly as the car moves from “current flagship” to “legacy icon.”
Investor Note: “If you want a Model X, now is the time to order,” Musk warned. Once the Q2 2026 deadline passes, the falcon-wing SUV will officially join the original Roadster in the Tesla archives.