Elon Musk made a big announcement about Tesla on Wednesday, saying in an earnings call that the company would be ending production of its Model S and Model X, and converting the Fremont factory to production of the Optimus robot.

After contributing to a his own brand's toxicity over the last year through his association with the Trump administration, and amid steepening competition from other luxury EV makers, Elon Musk announced Wednesday that Tesla would be scaling back its car production and pivoting, at least in part, to being a producer of humanoid robots — the market for which seems far from clear?

"It’s time to basically bring the Model S and X programs to an end with an honorable discharge,” Musk said during Tesla's Q4 earnings call. “So if you’re interested in buying a Model S and X, now would be the time to order it."

As CNBC notes, the Model S, which began production in 2012, and the Model X, are Tesla's second- and third-oldest models, after the original Roadster. The models apparently only account for around 3% of production these days, with the other 97% of Tesla's production devoted to the more popular, and less expensive, Model Y and Model 3. And Musk said Wednesday that the final versions of both models X and S would be produced in the upcoming quarter.

Musk spoke about the "completely new supply chain" for Optimus robots, and said he expected to increase both headcount and production at the Fremon facility once the production lines convert.

Tesla had a fairly terrible year in 2025, showing its smallest annual profit since the pandemic, and the company has seen two years of declining sales. As the Associated Press reports, Musk told investors not to focus on car sales, but instead to focus on the future of artificial intelligence, both with Tesla's Robotaxis, and the Optimus robots.

And while competition in the EV market is partly to blame, one can't discount the damage Musk did to the Tesla brand generally — and to his own reputation, with the scandals around his AI chatbot Grok compounding the situation.

"They’ve got aging product that is less and less competitive as other manufacturers come out with new models, then there is the general brand destruction," says Telemetry analyst Sam Abuelsamid, speaking to the AP. "Musk‘s involvement in politics has turned off customers."

Previously: California Now Investigating xAI Over Grok's Non-Consensual Deepfake Imagery