RIP: Model S and X production to end in Q2 2026!

[henchman24]

Tesla is already getting pretty creative with the Model Y. In Europe right now, there are five trims:

- Standard
- Standard Long Range
- Premium RWD
- Premium AWD
- Performance

Then in China, there's the extended YL version. And now there are rumors of a longer-range "YL Plus".

Not sure how much further they can run with this. I suppose they could take the extended YL, put a bed in the back, and market it as the Y pickup. That would be ironic, because it was what most people expected years ago when Tesla announced that it was entering the pickup market.

Many of those are just trims (all except YL really), but platform sharing can reach extremes. VW's MLB platform underpinned the Audi A4 all the way to the A8 to the Lambo Urus and Cayenne. The new PPC platform (2024 debut) is already Q5/7/9 and A5/6 with the expectation of extending to Lamborghini and Porsche as well. 10+ models on one platform isn't all that uncommon. Tesla may call them 3/Y something, but hitting different segments like the YL does.

I'd expect a stretched 3 (why not call it 3L?), a YL to come to NA and Europe eventually (YL would have cratered X sales here, and no longer an issue), a compact Y (YC?) for Europe/Japan/Korea, and another model or 2 (Y pickup would be fantastic IMO). Not a ton, but fill some segments with minimal development cost and no longer a worry of cannibalizing S/X sales.

Selfishly, I want a Plaid 3. The 3 is a better driver's car than the S, and a tri-motor version of the 3 would be an amazing performance vehicle. Doesn't make a ton of sense with maybe 10-20k in volume though.

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[Outdoors]

An updated version of the Roadster sports car, Tesla’s first-ever vehicle, will be its last traditional vehicle. All other new Teslas will be autonomous vehicles, Musk said.

 

[YDR37]

An updated version of the Roadster sports car, Tesla’s first-ever vehicle, will be its last traditional vehicle. All other new Teslas will be autonomous vehicles, Musk said.

Elon did say that, and I believe him. But I think that new variations on the existing 3/Y platform are still possible.

The Cybertruck, of course, is also an existing platform, but I don't expect to see any significant new developments there. Volume is too low and the production process is too difficult.

 

[Gaximus]

I don’t think I’ve ever been happier to see a vehicle get canceled! Just ordered my track package before they completely sell out of those and will be turning my Model S Plaid into a true 200 mph unicorn!!! ZOMG!!!!!! So happy!!!

If you didn't think you were getting a lot of software updates for the CT, image having a vehicle not being produced anymore.

 

[ChiTownCT]

If you didn't think you were getting a lot of software updates for the CT, image having a vehicle not being produced anymore.

Pretty much this, and I fear CT will be in the same boat..

 

[Darmie]

R.I.P. Back in 2017 we bought our first Tesla. a year later, my wife wanted an MX. We've owned them all since then. I was hoping after retirement next couple of years that I would finally get my MS back. I guess those plans are changing.
I miss Electra...

 

[dalton108]

Sigh. Our first S arrived in Feb 2013 (after we flew - FLEW - for a test drive in Miami as they weren't in Texas at that time). Had two more since, and an X. I always thought X would go first; as a car, it's batshit crazy with all it's wacky features, and we loved it, but it's not mainstream, and Tesla never really figured out how to build them efficiently. Our 2023 Refresh leaked like a sieve when it rained, they could never fix it (but we still loved it).

There's growing rumors that the YL is coming here, so this clears the path for that. Like others, gambling the future of Tesla on robotic and autonomy seems wild to me; people still want to drive, and Tesla makes cars more efficiently than any other company. Franz's S design is as timeless as it gets.

I'm surprised Tesla isn't doing some sort of 'retirement' package for S & X. Bring back the Founder Red, or some other color, add a couple of bells and whistles and sell it as the last ever version. I think that would sell well.

I also think there's normally a place for halo products for any brand (ignoring Roadster here). But I do think the polarizing nature of Elon has put people off, so if someone wants to spend $120k on an EV sedan/SUV, they'll go to the safe choices of Merc, Audi, Cadi etc... Not saying I agree with that, and depreciation is crazy on their EV's, but doesn't matter. Safe brands. This entire thing strengthens Rivian's position in the US, they're clearly committed to a full roadmap of vehicles.

This is all playing out in the open, and Elon has been really clear, it's time to stop thinking of Tesla as an automotive company, but Elon has such a skewed view of the world (how could he not), it's not grounded in reality. People want to drive sometimes!

100% agree with all of this. But I’m feeling like a complete and total genius right now. I bought my model S plaid right after the huge price drop in 2023 so at the cheapest entry point ever, with the best hardware ever because you can’t get the Rizen computer anymore (not that that’s going to age well -but it is still the pinnacle of what they produce produced) and once my track package gets installed on Monday (provided no hiccups) it will become one of (best estimates I can find using all of the AI and research) maybe 1500 worldwide 200 mph capable family sedans. You can’t even touch it for less than $250,000 and that doesn’t count for the fact that it’s a 24 hour seven day a week chauffeur.

I’m walking on sunshine right now!

 

[rrizzi7210]

I think this is all related to the EV tax credit non-renewal. Tesla has no choice but to cut costs, so S & X are gone, which was a tough choice. It will clearly concern existing owners, but Tesla can still support the platforms and is likely to do so for at least the next 10 years. CT may go the same way, due to low sales, because too many people have issues with it. I own one and couldn't be more pleased with more aspects of it to mention.

However, in about ten years, kids of today will be buying them as adults because almost all kids think they are cool. Just about everywhere, their heads turn while their moms murmur, "I just don't like the way it looks....."

None of this will matter anyway in 15 years, when the cost of insurance to drive yourself anywhere will be $5,000+ per month. We just have to ease into this mindset over time, which we will.

Autonomous robots are going to be the biggest threat to humans in 5 to 15 years, and neither Congress nor most Americans are even remotely prepared for the impact on their daily lives. Elon certainly knows this, and is going to continue to guide the company in that direction. The only thing that might stop or slow him down is "government regulation", which will be an issue. However, history has proven that government is too slow to keep up with the pace at which technology changes.

 

[SCTesla]

I think this is all related to the EV tax credit non-renewal. Tesla has no choice but to cut costs, so S & X are gone,

How would this have anything to do with the tax credit, which most of the S/X never qualified for?

The S/X were the highest margin vehicles in Tesla fleet. This is about almost non-existent sales and wanting to utilize the factory floor and workers efficiently.

 

[rrizzi7210]

How would this have anything to do with the tax credit, which most of the S/X never qualified for?

The S/X were the highest margin vehicles in Tesla fleet. This is about almost non-existent sales and wanting to utilize the factory floor and workers efficiently.

The tax credit drove sales for Tesla, which generates profits. Since they ended, sales have dropped, and their profit, so now they have to cut costs anywhere they can to drive shareholder value.

In other words, cut S & X production to drive profits up since S & X did not contribute much to their bottom line compared to 3 & Y.

 

[SCTesla]

The tax credit drove sales for Tesla, which generates profits. Since they ended sales have dropped, and their profit, so now they have to cut costs anywhere they can to drive shareholder value.

In other words, cut S & X production to drive profits up since S & X did not contribute much to their bottom line compared to 3 & Y.

The S&X had a higher gross margin per car than the 3/Y. Sales company wide have been down 3 years in a row and the S/X were the biggest losers. There was no cliff on the S/X from the tax credit as it didn't apply to almost all S/X sales (LR MX was eligible with no options).

Now if they were shutting that factory down and firing the people who worked there, I could see the point, but they are repurposing for bots which are 2-3 years out.

Tesla still received 52% of their profit from regulatory credits in Q4 which will be gone this year. So yes, Tesla will be much less profitable and without them would have had a loss last year, but again this was about the S/X combined only selling less than 30k vehicles and having a line to produce them. The CT actually sold less on a single line. but it's new and Elon still keeping it for now.

 

[txtravwill]

Tesla stuck with a 3/Y only at the rate they refresh along with likely dismal CT numbers paints a decline for a while.

Robotaxi isn't going to be a money breakthrough and slow to uptick. It's expensive fleet ownership with liability exposure big time. Optimus, the generation that does release first isn't going to be a massive seller for say a decade or so.

 

[rrizzi7210]

The S&X had a higher gross margin per car than the 3/Y. Sales company wide have been down 3 years in a row and the S/X were the biggest losers. There was no cliff on the S/X from the tax credit as it didn't apply to almost all S/X sales (LR MX was eligible with no options).

Now if they were shutting that factory down and firing the people who worked there, I could see the point, but they are repurposing for bots which are 2-3 years out.

Tesla still received 52% of their profit from regulatory credits in Q4 which will be gone this year. So yes, Tesla will be much less profitable and without them would have had a loss last year, but again this was about the S/X combined only selling less than 30k vehicles and having a line to produce them. The CT actually sold less on a single line. but it's new and Elon still keeping it for now.

I see your point now. So, this is really more about opportunity cost since Optimus is part of their core focus in the next few years, and building a new production facility is very costly.

Per NBCNEWS.com "Tesla is de-emphasizing traditional cars in favor of Robotaxi/Cybercab, Optimus, Semi, energy storage, and (eventually) more affordable next-gen vehicles. S/X don't fit the autonomous/robotics vision well; continuing them diverts focus from higher-growth areas. Complexity (e.g., falcon-wing doors on X) adds manufacturing overhead without scaling benefits."

 

[YDR37]

Tesla stuck with a 3/Y only at the rate they refresh along with likely dismal CT numbers paints a decline for a while.

In the 2Q 2025 earnings call last July, Elon warned about potential upcoming difficulties in late 2025 and early 2026:

Musk acknowledged that with $7,500 consumer EV purchasing credits set to expire in September, and autonomous-driving technology at an early stage, the company could have "a few rough quarters."

"Yeah, we probably could have a few rough quarters," Musk said. "I'm not saying we will, but we could," citing the fourth quarter through the first half of next year.

He was optimistic about the future, though.

"Once you get autonomy at scale in the second half of next year, certainly by the end of next year," Tesla's business would be "very compelling," he said.

So 4Q 2025 was the first of those "rough quarters". It's likely that 1Q 2026 will be even rougher, since the first quarter of the year is typically the slowest for vehicle sales.

But If Elon is right, we should then expect to see dramatic improvement in late 2026.

 

[txtravwill]

In the 2Q 2025 earnings call, Elon warned about potential difficulties in late 2025 and early 2026:

So 4Q 2025 was the first of those "rough quarters". It's likely that 1Q 2026 will be even rougher, since the first quarter of the year is typically the worst for vehicle sales.

But If Elon is right, we should then expect to see dramatic improvement in late 2026.

I'd estimate a good 5+ years of decline, sharper when new Y ages some again. Robotaxi won't move the needle any, may cost more in reality. I don't see any new products as well in that time frame making substial differences, especially not Optimus.

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