WASHINGTON (dpa-AFX) - In a move that signals a strategic shift, Tesla Inc. (TSLA) has announced plans to cease production of its flagship Model S and Model X vehicles.
Instead, the company will repurpose its Fremont, California, manufacturing facility to focus on the development and production of Optimus humanoid robots.
During Tesla's fourth-quarter earnings call, CEO Elon Musk stated that the Model S and Model X will be 'retired with an honorable discharge,' encouraging interested buyers to place orders soon.
The Model S, introduced in 2012, and the Model X, launched in 2015, have seen declining demand as the electric vehicle market has become increasingly competitive, despite recent price cuts.
Tesla's growth has been predominantly driven by its lower-priced Model 3 and Model Y vehicles, which accounted for 97% of deliveries in the previous year. This strategic shift comes as the company reported its first annual revenue decline, prompting a pivot towards autonomous driving and robotics technologies.
Musk revealed that the Fremont site will house a production line capable of manufacturing up to 1 million Optimus robots annually, with plans to increase hiring to support this new venture.
The company's focus on robotics underscores its ambitions to expand beyond the automotive industry and capitalize on emerging technologies.
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