Tesla kills off the Model S and Model X amid second straight year of losses

Tesla is reportedly discontinuing its two oldest models amid a second year of revenue losses.

According to an earnings call conducted on Wednesday, Tesla CEO Elon Musk announced that it will end production of the Model S and Model X next quarter, with Musk also noting that it “is slightly sad, but it’s time to bring the S and X programs to an end, and it’s part of our overall shift to an autonomous future.”

The Model S has been in production since 2012, serving as the unofficial replacement for the original Tesla roadster. The Model X was the company’s first dabble in the SUV market and was released in 2015.

As mentioned earlier, Tesla also reported its second year of declining revenue and profits. According to The Verge, Tesla reported net income of US$840 million (approximately C$1.13 billion) and revenue of US$24.9 billion (about C$33.6 billion) for the quarter ended December 2025. This is a three per cent drop in revenue and a 61 per cent decrease in profits compared to Q4 of 2024, when the company earned $2.3 billion (or C$3.1 billion) in net income and US$25.7 billion (C$34.7 billion) in revenue.

As noted by Gizmodo‘s Zac Estrada and Mike Pearl, a major reason for the discontinuations is Tesla’s plan to start building robots, as evidenced by Musk’s “shift to an autonomous future” line. The company is freeing up space within the Fremont, California plant for mass production of the Tesla Optimus robots. However, the company has seen major losses, and the two vehicles have not been updated to the new Model Y and Model 3 version of styling, so declining sales could have been the final nail in the coffin.

Now, with the company seeing (sometimes rapidly) declining sales, and competition from Chinese EVs set to debut in Canada, it remains to be seen whether it is a good idea to pivot away from the market that made Tesla so much money.

Source: Gizmodo