By John Q. Hosedrinker 
Tesla CEO Elon Musk revealed plans to phase out the Model S and Model X electric vehicles this year during a call with investors. This shift is part of a larger company strategy to focus on robotaxis and humanoid robots, coinciding with the retooling of a California factory for Optimus robot production. While the Model S and Model X played a crucial role in the early adoption of electric vehicles and Tesla’s growth, sales have recently slowed due to increased competition and other factors. Musk also noted that despite the change in production, Tesla would continue to support existing vehicles.
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Elon Musk says Tesla will stop producing its S and X models as it shifts to making robots, which raises a whole host of questions, doesn’t it? It seems like a pretty significant pivot, moving away from the vehicles that have, at least to some extent, defined the company, and towards something entirely new. One can’t help but wonder if this is a strategic masterstroke or something else entirely.
This shift feels like it might be motivated by several factors, including the increasing competition from Chinese electric vehicle manufacturers who are offering compelling vehicles at competitive prices. There’s also the broader context of Tesla’s valuation, which some consider to be inflated, based on promises that haven’t fully materialized, like the ubiquitous “robo-taxi” fleet. Focusing on robots could be a way to attract investor interest, but it’s a risky strategy given the current situation.
The decision to retool a California factory to produce humanoid robots is a bold move, but it has some serious drawbacks. The existing “demo robots” seem to be remote-piloted, which makes me wonder about the true level of autonomy. If the robots aren’t fully functional, it’s not a viable product for the future. The robot concept could also be an attempt to secure public funding, and maybe it will work, but the question of demand remains.
The move seems to indicate a lack of confidence in the future of car sales. Some of the reasons provided for this are that the door handles on Teslas in China stop working when there is no power in the car. Others are the failure of Tesla’s FSD and the fact that other companies using LIDAR are doing a better job. The shift to robots could be a way to navigate lawsuits related to faulty vehicles and failing technology, particularly the Full Self-Driving system.
But even with the shift, the challenges remain. Demand for robots isn’t guaranteed, especially from the general public. Where will the demand come from? Government contracts or niche applications seem more likely initially. There’s a concern that the technology isn’t yet mature enough for widespread adoption, and the fact that people are wary of robots, especially those under Elon Musk’s control, is definitely something to consider.
This change seems to be happening to save face, because sales of the S and X models are decreasing and the company is closing factories. But the “robot” project feels like a way to prevent the brand from becoming irrelevant. The robots might not be welcomed into people’s homes. Some also question the company’s focus, suggesting it might be better off concentrating on its core business.
A car company that is not focused on cars…it is hard to know where to begin. It’s almost comical to imagine Tesla competing with established players in the robotics space, but the company is definitely in a tight spot, and this appears to be the most promising option at the moment. It could be the next phase of the “promises that don’t exist yet”, which have allowed the company to stay afloat for a long time.
There’s a prevailing feeling that this could be a misguided move. The fact that the world “at large hates Musk” seems to play a part in it. The whole situation feels like a movie, and not a great one. The robots are just remote controlled puppets and people don’t want a “crappy Tesla robot.” This shift feels like a huge gamble, especially when Tesla is not capable of competing with Chinese EV’s.