In a single call, Tesla announced it’s killing the Model S and Model X, has no plans for new mass-market models, and is pivoting entirely to “transportation as a service.” The company that revolutionized the auto industry is walking away from it, not because it failed, but because Elon Musk got bored and found new toys.
What Happened to Tesla Today
When asked if Tesla has plans to launch new models to address different price segments, VP of Vehicle Engineering Lars Moravy gave a telling response:
“You have to start thinking about us as moving to providing transportation as a service more than the total addressable market for the purchased vehicles alone..”
Read that again. Tesla’s head of vehicle engineering is telling you to stop thinking of Tesla as a company that sells cars.
Musk doubled down:
“I really think long-term, the only vehicles that we’ll make will be autonomous vehicles.”
He predicted that “probably less than five percent of miles driven will be where somebody’s actually driving the car themselves in the future, maybe as low as one percent.”
And then came the killing blow: Model S and Model X production ends next quarter. The Fremont line will be converted to manufacture Optimus robots instead.
Finally, in its latest 10k SEC filing, Tesla officially updated its mission to “building a world of amazing abundance” – whatever that means.
What Tesla is Left With
Let’s count Tesla’s current vehicle lineup:
- Model 3 — Successful (but in decline)
- Model Y — Successful (but in decline)
- Model S — Being killed
- Model X — Being killed
- Cybertruck — Commercial failure, selling approximately 20 to 25k/year against 250k capacity
- Tesla Semi — Still not in volume production after years of delays
That leaves Tesla with exactly two successful vehicle models. Two. And there are both in decline.
And instead of building on that success, expanding into new segments, addressing affordability, competing with the flood of new EVs from legacy automakers and Chinese competitors, Tesla is walking away.
The USD 25,000 Tesla that Musk promised for years? Scrapped.
New models to compete with the likes of the Hyundai, Lucid, Rivian, or the wave of affordable Chinese EVs? Not coming.
Tesla’s answer to everything is now the same: wait for robotaxis.
The False Choice
Here’s what makes this so frustrating: Tesla didn’t have to choose.
The company could have spun off its AI and robotics efforts into a separate entity, call it Tesla AI or whatever, while keeping Tesla, the automaker, focused on what it does best: building and selling great electric vehicles and accelerating the industry’s transition to electric transport.
Or it could have done the reverse: spin off the automotive business and let Musk pursue his AI dreams with the parent company. Either way, there was no point in letting great EV programs die.
Tesla could have continued to invest in electric vehicles, leverage its expertise in batteries and power electronics, to accelerate EV adoption and stationary energy storage deployment, and could have licens
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