Tesla demolishes Fremont factory lines for Optimus robot production
Tesla ends Model S and Model X production after a combined 25 years to make room for humanoid robot assembly lines targeting 1 million units annually
Tesla is tearing out the bones of its Fremont, California factory. The automaker has begun demolishing production lines that previously built the Model S and Model X to make way for high-volume Optimus humanoid robot manufacturing.
The Model S and Model X lines went dark in early May 2026. The Model S had been in production for 14 years. The Model X ran for 11. Together, they represented the vehicles that first made Tesla a credible luxury automaker. Now the space they occupied is being rebuilt for something Tesla has never manufactured at scale before.
What is actually happening at Fremont
The repurposed floor space is being configured as an Optimus Gen 3 assembly operation. Tesla’s stated target is an annual production capacity of 1 million units.
Limited production is expected to begin in late July or August 2026. CEO Elon Musk has already tempered expectations, noting the initial ramp-up will be slow. The reasoning is straightforward: Optimus is a fundamentally new product with a supply chain and manufacturing process that has never been stress-tested at volume.
The Fremont factory will not become exclusively a robot facility. Model 3 and Model Y production continues on separate lines, meaning the site is effectively running two distinct manufacturing operations under one roof. Tesla has also stated it does not anticipate any employment changes at the factory as a result of the retooling.
Beyond Fremont, Tesla has announced plans for a second Optimus production line at its Giga Texas facility, with that line targeting a summer 2027 launch.
What investors should watch
For investors, the first real data point will be whether Tesla actually begins Optimus production in the late July to August 2026 window.
The second data point is unit economics. Tesla has not publicly specified the pricing or margin profile of Optimus Gen 3 at volume. The company has discussed using Optimus robots internally across its own factories first, which means initial production may not translate directly to external revenue.
The Giga Texas second line, targeting summer 2027, matters as a confidence signal. If Fremont ramps even modestly on schedule, the Texas announcement shifts from ambition to roadmap.