In a seismic strategic shift, Tesla CEO Elon Musk has confirmed the termination of two of the company's most iconic electric vehicles. During a pivotal investor call, Musk declared that production of the Model S sedan and Model X SUV will be wound down next quarter, freeing critical resources to accelerate Tesla's ambitions in artificial intelligence and robotics.
A Calculated Retreat from Automotive Heritage
The decision marks a profound transition for the world's most valuable carmaker, currently commanding a market valuation approaching $1.5 trillion. This move comes as Tesla contends with two consecutive years of declining vehicle sales and recently ceded its title as the globe's top EV seller to Chinese rival BYD. While the Model 3 and Model Y—higher-volume, revenue-generating workhorses—will remain in production, the axing of the flagship models signals a clear departure from Tesla's original core identity.
The factory in Fremont, California, previously dedicated to assembling the Model S and X, will be entirely repurposed. Its new mission: manufacturing Tesla's humanoid robot, Optimus. Musk frames this not as a retreat from automotive, but as a charge towards what he terms the "biggest product of all time."
The 'Optimus' Gambit: An Economic Transformation
Musk's vision for the bipedal Optimus robot is nothing short of revolutionary. Designed to navigate human environments, it is touted to perform tasks ranging from factory work to customer service in hospitality and retail. "Essentially, in the future, physical work will be a choice," Musk proclaimed, suggesting a future where human labour is optional.
He has even posited dystopian-utopian applications, such as using the robots for personal security to prevent crime, potentially reducing incarceration needs. The scale of his ambition is staggering: Musk predicts Optimus will become an "infinite money glitch," eventually constituting 80% of Tesla's value and propelling the firm towards a $25 trillion valuation by 2050.
Sky-High Stakes and Skeptical Voices
The financial incentives for Musk are historically unprecedented, with a $1 trillion bonus package contingent on hitting targets including an $8.5 trillion company valuation within the decade. However, this audacious bet faces significant scepticism from within the robotics community.
Prominent figures like MIT roboticist Rodney Brooks, co-founder of iRobot, have labelled the concept of a general-purpose humanoid assistant economically and technologically unfeasible in the coming decades. "In my opinion, believing that this will happen any time within decades is pure fantasy thinking," Brooks stated, warning of billions likely to be lost in the pursuit. He envisions a future of specialised, non-humanoid robots rather than the human-mimicking form of Optimus.
Tesla's pivot represents a high-risk, high-reward strategy. By sacrificing established, though declining, automotive lines, Musk is staking the company's future on a technology that promises to reshape society but remains unproven at the scale he envisions. The coming years will reveal whether this gamble on robotics constitutes genius foresight or a costly diversion.
