Tesla Halts Model S and X Production, Converts Factory to Humanoid Robot Manufacturing

Historic Shift in Tesla's Production Strategy

Tesla is achieving another industry first by deciding to halt production of its luxury Model S and Model X vehicles. Announced on January 29, 2026, this fundamental change will reshape the fate of the company's Fremont factory in California. The facility will be converted into a mass production center for Tesla's humanoid robot project, Optimus. This move is shaking the industry as a tangible indicator of the transition from automotive to robotic manufacturing.

Optimus Project: From Laboratory to Factory

According to information shared on January 26, 2026, the Optimus project is now moving beyond laboratory and testing phases. The company has designated the Fremont facilities as a strategic base for training the robots in real production environments and integrating them into serial production processes. This transition is considered a critical threshold for the industrial-scale implementation of AI-powered robotic systems.

Legacy of Model S and X and Looking to the Future

The Model S and Model X served as Tesla's flagship vehicles in the luxury electric car market for many years. However, the weight in the company's production portfolio has already shifted toward higher-volume vehicles like the Model 3, Model Y, and the upcoming compact model. As noted in forum discussions, the discontinuation of these models is part of Tesla's strategy to channel its resources into more profitable and mass-market projects.

Details and Impacts of the Factory Transformation

The transformation process of the Fremont factory is expected to proceed gradually. Existing vehicle production lines will be optimized for the assembly, testing, and software updates of Optimus robots. Key points emerging in this process include:

• Workforce Transition: A portion of the current employees are planned to be retrained for robotic production and maintenance processes.
• Supply Chain Revision: The shift will necessitate a comprehensive overhaul of the supply chain to support robotics manufacturing.
• Production Timeline: The conversion is projected to occur in phases, with full-scale Optimus production expected to commence by late 2026.
• Market Implications: This move signals Tesla's deepening commitment to AI and robotics, potentially opening new revenue streams beyond the automotive sector.

Industry analysts are closely watching how this bold realignment will affect Tesla's market position and whether it will set a precedent for other automotive manufacturers to diversify into advanced robotics.