The announcement was made by Musk during the company's earnings call.
The Fremont factory will still manufacture Model 3 and Y, but the space where Model S and X are made will instead focus on mass production of its Gen 3 Optimus robots.
According to Tesla, the Gen 3 Optimus is the company's first mass production design, and it is aiming to manufacture a million robots per year in Fremont, with production beginning by the end of 2026.
Musk said the move is part of the company's transition to an "autonomous future."
The Model S and X are exclusively manufactured by the Fremont factory. According to Salwan, they account for about 3% of total models sold, and Model 3 and Y vehicles actually account for most of the factory's output.
Musk stated that there are no plans for layoffs at the Fremont factory, and instead, it's possible they hire more workers.
"The City of Fremont looks forward to supporting Tesla's continued growth of both its physical footprint and employment base in Fremont for years to come," Salwan said.
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