Tesla is pivoting to turn its cars into a side business. The reason: their income falls by 61%

The Tesla Model S and Model X are incredible cars. Get them while they’re still available!

With these phrases, Elon Musk, CEO of Tesla, has accompanied the company’s announcement in X in which they point out that during the next quarter they will reduce their production of the Tesla Model S and Model To its credit, the company will produce Optimus robots.

by surprise. It was known that Elon Musk has been pushing for some time for Tesla to increase its investments in artificial intelligence and robots, either in humanoid form like Optimus or through its robotaxis for autonomous driving. But what we did not expect is that this bet would displace two of its most iconic models.

And the company will stop producing its Tesla Model S, its first sedan, and the Model X, its first SUV, in Freemont (California) to make way for the production of Optimus robots. The company closes a chapter by recognizing that “Tesla would not be what it is today” without these cars.

A paradigm shift. The decision to invest in this factory to increase robot production is more than just a redistribution of its efforts, it is confirmation of a change in strategy in the company. Musk seeks invest $2 billion in xAIthe company dedicated exclusively to artificial intelligence.

Intertwining your companies is one of the obsessions from the CEO of Tesla so that some feed each other. xAI is key to power and improve Grok which, in turn, is already included in Tesla vehicles as an artificial intelligence assistant. At the same time, xAI is also decisive for the functioning of its robotaxisthe cabin without wheels or steering wheel that Tesla wants to put on the street to offer a completely autonomous taxi service.

More than complicated numbers. Optimus has left many doubts and Musk himself has confirmed that he expects a slow deployment. However, dedicating a plant that only manufactured a handful of cars is not only confirmation that the company does not care in the least about killing a product if it understands that it is not profitable or that its future is much less interesting than a new bet. Changing the use of the factory is also a necessity.

And the numbers presented by Tesla are something much more than complicated:

• Net profit has gone from 7.1 billion to 3.8 billion dollars, 45% less.
• In the last quarter, turnover has fallen from $2.1 billion last year to $840 million. It is a drop of 61%.
• The company has delivered 1.64 million cars in 2025 in what is its second year reducing its sales.
• In the United States the drop in sales is 7%, according to Cox Automotive, reported in The New York Times. 
• In the same period, it is estimated that BYD has sold 2.25 million cars Purely electric.

Loss of identity. The Tesla Model S and Model X have become residual cars for the company since the Model 3 and Model Y occupied the bulk of sales. Both are very expensive cars that cost around or exceed 100,000 euros. Both the saloon and the SUV served the brand to boost your image and personality as unique cars. Over the years, that has been lost.

And the huge screens that previously surprised now do not stand out in a market that has turned to trying turn the cabin into a multimedia centerespecially in China. Your own assembly line has been forced to keep its design unchangedwhich has made them lose freshness. The popularization of its Tesla Model 3 and Model Y has popularized access to the company, making them lose part of that desirable car aura.

A cut production. The decline in sales has led to declining production of both models. To give us an idea, nothing is better than the data provided by the company itself:

• 2022: 71,777 units produced and 66,705 deliveries
• 2023: 70,826 units produced and 68,874 deliveries
• 2024: 94,105 units produced and 85,133 deliveries*
• 2025: 53,900 units produced and 50,850 deliveries*

Starting in 2024, Tesla accounts for the production and deliveries of the Tesla Model S, Model X and Cybertruck in the same item. That’s whyCybertruck sales are estimates outside of Tesla

The Tesla Model 3 and Model Y Standard confirms a story. The story of what I want and I can’t of Tesla’s 25,000 euro carThe limits . Tesla is in a stagnant situation with its electric cars. The company stepped on the accelerator in 2024 to remain the best-selling electric car brand in the world and improve the previous year’s data. But it did not succeed, going from 1.85 million cars produced and 1.81 million cars delivered in 2023 to 1.77 million units produced and 1.79 million cars deliveredin 2024 . Year in which, in addition, They increased their range with the Cybertruck

which started at a very good pace.

The company, therefore, needs to kill some very expensive cars that are barely generating a positive impact on its accounts no matter how high the profit margin obtained with each unit. To begin with, because the company needs a boost from its investors, who seem to support these decisions. And, second, because we have to see if the company has not already peaked in its vehicle sales. At leastwith its particular way of producing cars with huge presses that are only profitable by manufacturing millions and millions of units. Although he has put efforts into them, Tesla has not managed to put more affordable models on the street

to continue increasing its customer base and, clearly, its most expensive vehicles have been giving discreet results in recent years.

Photo | Faces Creative StudioIn Xataka |

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The news

Tesla is pivoting to turn its cars into a side business. The reason: their income falls by 61%

was originally published in

Xataka
by

Alberto de la Torre

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