Elon Musk announced that Tesla will stop manufacturing cars to make Robots

At the beginning of 2026, Tesla entered exactly that objective during the presentation of the financial results for the fourth quarter of 2025 and Elon Musk announced that until a few years ago it would seem unthinkable, the company is going to close the production of Mode S and Mode

According to Musk, the Freemont, California factory will be partially converted into a line dedicated to the third generation optimus, Tesla is exchanging luxury cars for artificial workers. Musk described the decision as an honorable conclusion for the two models, making it clear that the company's priority is no longer selling vehicles, but rather manufacturing a workforce.

This transformation is accompanied by an aggressive investment plan, more than $20 billion by 2026 allocated to the construction of six new factories. a unit dedicated exclusively to robotics and a massive expansion of artificial intelligence computing infrastructure.

For Musk, the Optimus is not a product, it is the basis of a new economy. He states that Tesla's mission now is to create a future of incredible abundance, where theft takes over practically all physical work, allowing something close to what he calls universal high yield, but that future, according to him, starts slowly, very slowly.

Musk described the initial phase of production as agonizingly slow, the reason is simple, today there is no supply chain ready for humanoid robos, every actuator, motor, sensor, joint, plate needs to be reinvented for a new type of machine. Tesla's internal goal is to reach a production cost around $20,000 per unit, but Musk admitted that the first models will cost much more because the cost, in his words, will always be defined by the most fragile, rarest and least reliable part of the system.

And then came the phrase that ignited the sector, when asked about the competition, Musk stated, "How far do we know? We do not see any significant competitor outside of China, in his vision, Chinese companies are today the only real threat due to dominating the critical factors, ability to scale production quickly and practical application of already in the physical world.

That statement ignores giant names on the American scene, Boston Dynamics, which unveiled the new production-ready electric Atlas, Figure AI, which recently showed off its Helix 2 system controlling robberies with full-body autonomy, and 1X Technologies which develops world models capable of making robots imagine tasks before executing them.

Still, Musk seems convinced. For him, the battle will not be won by whoever has the best robot today, but by whoever manages to build factories capable of producing robots in industrial volume. This is where the plan for the so-called Terrafs comes in, facilities where Tesla intends to integrate in a single place the manufacturing of chips, memory, packaging, power electronics and final assembly. According to Musk, a theft without a chip is just an expensive model and depending on external suppliers for those chips would be an unacceptable geopolitical risk.

That's why Tesla wants to control everything, from lithium to silicon to the walking robot. If that plan works, Tesla stops being an automaker, stops being an energy company and becomes something new, a manufacturer of artificial species.

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