Tesla Inc. (TSLA) will stop production of the Model S and Model X to focus on developing Optimus humanoid robots at its Fremont, California, facility. CEO Elon Musk confirmed the move during the fourth-quarter earnings call, citing declining demand for the flagship vehicles in a competitive market.

The Model S and Model X, introduced in 2012 and 2015 respectively, will be “retired” soon. Tesla’s growth has been driven by the lower-priced Model 3 and Model Y, which made up 97% of deliveries last year. The company reported its first annual revenue decline, prompting a shift towards autonomous driving and robotics technologies.

The Fremont site will have a production line capable of producing up to 1 million Optimus robots annually. Tesla plans to hire more staff to support this new focus on robotics. This strategic move reflects the company’s ambition to expand beyond the automotive industry and embrace emerging technologies.

Read more at Nasdaq: Tesla To End Model S And X Production, Shift Focus To Humanoid Robots