Tesla bets on robots and robotaxis in the future – production of the Model S and X ends.
The US group reports an operating profit of $1.4 billion for the third quarter, and is thus slightly above analysts' expectations. In terms of revenue, Tesla meets the forecasts with just under $25 billion. On the stock market, the share initially reacts positively, rising as much as five percent at times and ultimately settling around three percent higher at $444.
Farewell to the S and X
Elon Musk announced in a conference call with analysts that production of the Model S and X would be discontinued. The production lines are to be shut down as early as the coming quarter. Musk justifies the decision with the desire to free up production capacity for new business fields. Existing customers, as the Tesla chief assures, will continue to receive technical support throughout the lifetime of their vehicles.
The Model S, introduced in 2012, was Tesla's first fully self-developed car. It made the brand known as a maker of high-performance electric vehicles with practical range for everyday use and distinctive design. Three years later, the Model X followed with its distinctive falcon-wing doors. Both models were revised multiple times, but in recent years they played only a minor role. In the past year, almost 97 percent of deliveries were Model 3 and Model Y.
Room for robots and robotaxis
The freed-up production lines are to be used in the future for Tesla's humanoid robot Optimus. Musk indicated that the machines would go on sale before the end of the year. In parallel, Tesla aims to begin manufacturing a self-driving robotaxi this year. The “Cybercab” comes without a steering wheel and pedals. Musk expects that these vehicles will be produced in much larger volumes in the long term than all previous models. The Cybertruck is also intended to operate autonomously in the long term, according to him.
To substantiate this vision, Tesla is investing around two billion dollars in the AI startup xAI, also founded by Musk. The carmaker is thus moving further toward technology and robotics companies. In the stock market, this narrative has thus far taken hold: Since the start of the year the stock has gained almost ten percent and is trading only slightly below its record high. Skepticism remains nonetheless, not least because of Musk's ambitious promises and presentations, which recently resembled more of a stage show.
Pressure in the core business
The economic reality is less shining. Annual revenue fell by three percent to $94.83 billion. In the car business alone the decline was ten percent. Net income collapsed by a little over a quarter to just under $5.8 billion. Tesla is feeling waning demand, intensified competition, and the expiry of government subsidies for electric cars in the United States.
In addition, there are image problems. Musk's political engagement with the administration of U.S. President Donald Trump at the beginning of 2025 has angered customers. The brand's reputation has suffered, especially in Europe. For Tesla, the departure of the Model S and X means more than the end of two model lines. The company is betting that robots, autonomous vehicles and artificial intelligence will write the next chapter.
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