On the fourth quarter earnings call, Elon Musk said EV company Tesla (TSLA) will retire its two oldest vehicles.

It will turn those production lines in Fremont, California into a factory for Optimus, its humanoid robot.

Buyers were told to order soon.

The programs are done.

The Model S launched in 2012. The Model X followed in 2015.

For a decade they were the proof that electric vehicles could be fast, luxurious, and desirable. Now they are a rounding error. Together they have been crushed by Tesla’s own cheaper cars.

The Model 3 and Model Y delivered 97 percent of Tesla’s 1.59 million vehicles last year. The S and X became expensive distractions in a market that moved on.

Tesla says the Fremont lines will be repurposed to build up to 1 million humanoid robots per year using a new supply chain. Staffing at the factory will increase. Robot output will ramp.

Tesla will unveil the third generation of Optimus later this quarter, calling it the first mass production design.

The disruption behind the news: Tesla is publicly admitting the car business has peaked.

The Model S and X are not being replaced by better cars.

They are being replaced by a bet that robots will matter more than vehicles.

This is a rational move and a dangerous one.

Rational because the economics are obvious. The S and X sell in low volumes at prices near $100,000. They tie up factory space that could be used for something with a steeper growth curve.

A humanoid robot that can do factory work or logistics tasks has a theoretical market measured in tens of millions of units. If Optimus can be built at scale for even $20,000 to $30,000 per unit, that undercuts industrial robots and human labor in the same breath.

Tesla is walking away from the halo that built its brand. The Model S was the original EV. Killing it signals that Tesla is no longer trying to win hearts. It's focusing on costs.

This also changes who Tesla is competing with. Not BMW. Not Mercedes. Not even BYD. It is competing with warehouse automation firms, robotics startups, and eventually labor itself. That is a very different regulatory and social battlefield.

The number to watch is one million units per year. That is industrial ambition. If Tesla hits even 10 percent of that capacity within two years, it becomes one of the largest robotics manufacturers on earth almost overnight.

What to watch next

First, real deployments.

Not stage demos. Look for Optimus units doing repetitive work inside Tesla factories within 6 to 12 months.

Second, pricing signals.

The moment Tesla hints at a sub $25,000 production cost, the labor market conversation changes fast.

Third, capital allocation.

If Fremont is robots now, other will factories follow. Tesla stock will start trading less like an automaker and more like a platform company with hardware risk.

Tesla just told the market that cars are no longer the point. Robots are. It's time for investors to stop valuing the company as a premium EV maker.