Tesla (NASDAQ: TSLA) will halt by Q2 2026 the production of Model S and Model X, with CEO Elon Musk saying on the company’s Q4 2025 earnings call that production is being wound down and will stop completely by end-Q2.
Musk framed the decision as driven by “autonomy,” and said the Fremont factory production line currently used for Model S and Model X will be replaced with a production line for Tesla’s planned humanoid robot, Optimus.
Tesla stopped breaking out Model S and Model X sales in 2023, rolling them into an “other models” category that also includes Cybertruck and Tesla Semi, reducing transparency on the flagship vehicles’ standalone demand trends.
Electrek tracked “other models” deliveries at 23,640 in Q4 2024, 12,881 in Q1 2025, 10,394 in Q2 2025, 15,933 in Q3 2025, and 11,642 in Q4 2025, totaling 50,850 for FY 2025. Because Cybertruck and Tesla Semi are included, Electrek estimated the Model S and X portion was “far lower,” and put the combined S/X number “likely in the 30,000 range” for all of 2025.
Tesla’s annual production capacity for Model S and Model X at Fremont was cited at 100,000 units, implying utilization has been running well below nameplate capacity for years under the reported delivery trajectory.
About seven months before the Q4 2025 call, Tesla introduced what Electrek described as a very mild Model S and X update, including a new paint color, a front bumper camera, slightly improved range, and ambient lighting features already present on Model 3 and Model Y. The same update included a $5,000 price increase, taking the Model S to $84,990 and the Model X to $89,990.
Model S launched in 2012 and Model X in 2015, with a notable interior refresh in 2021 that added the yoke steering wheel. Electrek also stated that Lucid Air has surpassed Model S and Rivian R1S outcompetes Model X.
Sliding margin
In Q4 2025, Tesla reported total automotive revenues of $17.69 billion, down 11% year over year and down from $21.21 billion in Q3 2025. Energy generation and storage revenue was $3.84 billion, up 25% year over year, while services and other revenue was $3.37 billion, up 18%.
Total revenues were $24.90 billion in Q4 2025, down 3% year over year and down from $28.10 billion in Q3 2025. Total gross profit was $5.01 billion, up 20% year over year, with total GAAP gross margin rising to 20.1%, up 386 basis points year over year.
Operating expenses were $3.60 billion, up 39% year over year. Income from operations was $1.41 billion, down 11% year over year, while operating margin was 5.7%, down 50 basis points.
Net income was $840 million, down 61% year over year, and $1.76 billion on a non-GAAP basis, down 16%. Diluted EPS was $0.24 (GAAP), down 60% year over year, and $0.50 (non-GAAP), down 17%.
Adjusted EBITDA was $4.15 billion, down 4% year over year, and adjusted EBITDA margin was 16.7%, down 17 basis points.
Net cash provided by operating activities was $3.81 billion, down 21%, capital expenditures were $2.39 billion, down 14%, and free cash flow was $1.42 billion, down 30%. Cash, cash equivalents and investments ended Q4 2025 at $44.06 billion, up 21% year over year.
Tesla last closed at $430.46, up 8.38% versus a year ago but down 4.06% year-to-date in 2026. Following the news, shares jump over 3% in pre-market trading.
Information for this story was found via Electrek and the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
