Musk recasts Tesla as an AI company behind its $1.5 trillion valuation as production credibility becomes vital for investors.
Tesla will stop selling its Model S sedans and Model X SUVs, marking a symbolic shift away from the flagship vehicles that once defined the company’s rise in the electric vehicle market. Elon Musk told analysts on a conference call that factory space previously used for the two models would be repurposed to build robots, underscoring Tesla’s growing focus on artificial intelligence and automation.
The decision comes as Tesla works to reposition itself beyond car manufacturing at a time of slowing growth. Revenue fell about 3 percent to roughly $94.83 billion in 2025, the company’s first annual decline, highlighting mounting pressure from intensifying competition, price cuts and softer global demand for electric vehicles. While Model S and Model X played a crucial role in establishing Tesla as an industry leader, they have gradually dwindled to account for only a small fraction of overall revenue.
Musk framed the move as a logical step in Tesla’s long term strategy, emphasising that robotics and AI represent a far larger opportunity than premium vehicles with limited volumes. He reiterated that Tesla aims to leverage its manufacturing expertise, software capabilities and data to scale humanoid robots, which he has previously described as central to the company’s future value.
Investors have increasingly focused on whether Tesla can execute on these ambitions as reliably as it once delivered disruptive vehicles. The shift away from legacy models signals confidence in new growth areas, but also raises questions about the pace at which emerging businesses can offset weakening car sales. For now, Tesla is betting that its next chapter will be built less on cars and more on machines powered by artificial intelligence.
