Tesla CEO Musk revealed that the company’s factory in Fremont, California, would be transformed into a production facility for robots.<\/b>
\nTesla CEO Elon Musk has made good on his threats to steer his EV maker away from his core business to focus instead on AI and its humanoid robot, Optimus.
During the company\u2019s fourth-quarter earnings call this week, the mercurial CEO announced that \u201cit\u2019s time to basically bring the Model S and X programs to an end with an honorable discharge\u201d \u2014 the clearest sign yet that Tesla is looking to get out of the car business as sales continue to circle the drain.
\u201cWe expect to wind down S and X production next quarter and basically stop production,\u201d Musk explained. \u201cThat is slightly sad, but it\u2019s time to bring the S and X programs to an end, and it\u2019s part of our overall shift to an autonomous future.\u201d
\u201cIf you\u2019re interested in buying a Model S and X, now would be the time to order it,\u201d he added, promising that existing owners would continue to receive support from the company as long as they\u2019re still on the road.
Most provocatively, Musk revealed that the company\u2019s factory in Fremont, California, would be transformed into a production facility for Optimus, an abrupt end to well over a decade of automotive manufacturing at the facility.
Both the Model S and X, a luxury sedan and SUV respectively, currently start at very close to the $100,000 mark, almost three times as much as the Model 3\u2019s starting price, making them a major \u2014 and questionable \u2014 investment in 2026.
Tesla\u2019s far more affordable Model 3 and Model Y, however, have become the company\u2019s biggest sellers by a huge margin, responsible for a combined 1.6 million deliveries last year, compared to sales of \u201cother models\u201d of just 50,850.
In other words, the Model S and X were already dead in the water.
The news comes amid a broader slate of genuinely disastrous sales figures at the company. Tesla reported its first-ever decline in annual revenue, with sales faltering across three of the past four quarters. It\u2019s the second consecutive year of overall decline, posting a steep 61 percent decrease in profits in Q4 of last year, compared to the same period the year before.
Now that Musk has massively tarnished the brand with his public embrace of far-right ideologies, putting a major dent in its cars\u2019 desirability, and competition in the space is stronger than ever, particularly from China, the richest man in the world is ready to move on to his next shiny obsession.
It\u2019s a major fall from grace, considering Tesla established itself as an EV pioneer early on, playing a major role in the popularization of electrification across the globe. But with its core business incurring devastating losses \u2014 and a major whiff in the form of the Cybertruck \u2014 Musk likely saw the writing on the wall.
Besides, Wall Street\u2019s infatuation with AI was likely too hard to resist. For now, investors are more than ready to play along with Musk\u2019s promises of transforming Tesla from a carmaker into an AI and robotics company. Despite a calamitous financial outlook, its share price has shown resiliency \u2014 soaring to an all-time high of almost $500 last month before falling back to around $422 this morning after the Q4 reveal.
Musk has some enormously optimistic plans in mind for Optimus. The executive has previously claimed that 80 percent of Tesla\u2019s value will come from the robot.
But considering the current state of the bipedal android, which is currently still struggling to walk on its own, let alone complete any useful tasks without any human intervention, the company still has a lot to prove.
During this week\u2019s call, Musk claimed that the plant in Fremont will produce one million units per year as a \u201clong-term goal.\u201d However, if reports citing insiders last year are to be believed, the company struggled to even meet its much more realistic goal of producing just 5,000 of them last year.
Musk also promised to show off a third generation as early as this quarter, the \u201cfirst design meant for mass production.\u201d
What the robot will be capable of in a real-world setting remains to be seen. Musk has previously promised that Optimus will eventually be even better than having a \u201cpersonal R2-D2\u201d or \u201cC3PO,\u201d referring to the fictional androids from the \u201cStar Wars\u201d franchise \u2014 a lofty goal, to say the very least.
But given the continued, unwavering support from investors, Musk and Tesla will likely be given plenty of leeway as the company continues to pull away from its core business.<\/p>\n