Tesla announced they will end production of their Model S and Model X vehicles. The factory lines in Fremont specializing in these cars are to be repurposed for Tesla’s forthcoming Optimus robot, though that product is still in early R&D. Reactions so far have been a mix of surprise and sadness, with some predicting the company will pivot away from cars completely.
But let’s focus on the Models S & X. These two cars put Tesla on the map as a serious car manufacturer.
The Model S was their first car designed and built from scratch1 in 2012. Their designers and engineers proved that electric drivetrains can output massive amounts of instant torque, handle well (thanks to low centers of gravity), and pack enough battery to travel 200+ miles on a single charge. Their software initially launched already on par with other luxury cars. But it outpaced the industry via continuous Over-the-Air (OTA) updates—something that traditional car manufacturers still have trouble with, a decade on.
A couple of years later, in 2015, they launched the Model X as the first mainstream EV SUV with three rows of seating. Tesla figured out how to cram the SUV form factor, with its additional height and weight and length, into an aerodynamic chassis with a remarkably low drag coefficient. You can still identify the Model X by its falcon wing doors, unique to this car throughout its decade of production.
In the 2010s, these were novelties in the EV world and faced little to no competition. By the 2020s, however, other carmakers have caught up, releasing their own feature-laden EVs in both the sedan and SUV form factors. Tesla themselves launched the Models 3 & Y; these mass-market cars now make up 97% of their sales2. Then again, this was always the plan.
The Models S & X, though, remained important as Tesla’s high-end flagships. Traditionally, car manufacturers invest in top-of-the-line vehicles and refresh them regularly—not for sales volume, but for prestige and driving the rest of their lineups forward. BMW and Mercedes introduce new interfaces, technologies, and systems in their 7 series and S-class cars. Multi-brand groups like Volkswagen and Toyota will focus their R&D on the more affluent brands, but bring those improvements across to mainstream brands down the line. And both segments benefit from this arrangement: new features debut in cars that have the margins to recoup their development, while affordable models iterate on established implementations later on. Tesla doesn’t refresh their vehicle models with the same frequency that other carmakers do. But they did follow this halo strategy—for a single refresh cycle.
Back in 2021, both flagships refreshed their interior designs. The cars introduced a yoke steering wheel with capacitive buttons, removed the drive and turn signal stalks, upgraded the computing hardware with a new CPU/GPU package, and used that extra power to drive another touchscreen in the back row3. Many of these features made their way back to the Models 3 & Y, with more iteration and refinement; for instance, the Model Y tried the whole no-stalks configuration, but the latest 2025 “Juniper” refresh brought one stalk back.
Contrast that vehicle cross-pollination with the recent 2024–2025 refreshes across Tesla’s lineup. For the Models S & X, they received minor cosmetic and convenience tweaks, with some features like the light bar deployed first in the Model 3. The updated hardware developed for the Cybertruck—800V battery architecture, steer-by-wire, rear-wheel steering—is nowhere to be found on any of their other cars.
In their earnings call, Elon is still promising to unveil an updated Roadster, but how they’ve handled their premium cars does not give confidence that this long-delayed performance vehicle can be a new halo car. Yes, it will come with new features and amazing performance, but none of it will make it back to the mass market 3 & Y. Most likely, this Roadster will be a 1-of-1 vehicle. Its bespoke systems won’t be shared, and the car won’t see any updates down the line.
But hardware and industrial design are only half the story. The company has a reputation for building computers on wheels, and software updates have kept all of their cars4 fresh for much longer than other carmakers. In particular, with consumer vehicles, their Full Self-Driving (FSD) and software architecture is years ahead of anybody else. As the rate of improvement scales with the amount of data collected from cars on the road, the company only needs to double down on its Models 3 & Y to make strategic progress.
Given all of these announcements and how the company is focusing on autonomy and robotics, it’s tempting to call this a pivot away from cars completely. I don’t think it’s that simple. The company has invested in so many factories, service and delivery centers, and Superchargers, to really just up-end all of it. If services like Lyft and Uber are any indication of how long it takes to familiarize the general public with new modes of transportation, robotaxis still have a decade or more of evolution and operation to enter mainstream acceptance. And if nothing else, Elon’s latest pay package includes strong incentives to deliver more cars, and not just abandon the business that took a decade to build up to this point.
They’ll just do it without flagships.
Tesla’s first car, the Roadster, was a repurposed Lotus Elise.↩
So the Models S & X, along with the disappointing Cybertruck, combine for the remaining 3%.↩
They also used the extra GPU power to run an early version of SteamOS natively in the car, but that feature was so niche that it went away in 2024.↩
Except for the OG Roadster.↩
