Tesla and SpaceX manufacturing expansions in Texas

Tesla and SpaceX are planning large-scale manufacturing expansions in Texas focused on vertical integration and supply chain security.

In August 2026, Tesla filed for tax incentives for ‘Project Crystal Sun,’ a proposed $10.1 billion solar cell manufacturing facility in Fort Bend County. The project aims to replicate manufacturing models currently dominated by China by producing core components, including ingots, wafers, cells, and modules, on a 3,050-acre site. Tesla plans to invest $1.5 billion in real property and $8.6 billion in equipment between 2026 and 2028, with commercial production projected to begin in early 2029.

Concurrently, SpaceX and Tesla announced plans for ‘Terafab,’ a massive semiconductor manufacturing facility in Grimes County. This project, which could see long-term costs reaching up to $119 billion, is designed to secure the hardware supply chain for artificial intelligence, autonomous vehicles, and orbital computing. The facility intends to integrate the entire production lifecycle, from mask design to final testing, under one roof.

Detailed plans for Terafab indicate it may become one of the world’s largest indoor structures, spanning approximately 9.3 million square meters (100 million square feet). Initial investment estimates for the semiconductor project range between $14.5 billion and $16.8 billion. The chips produced are intended to optimize edge computing and inference for Tesla’s Optimus humanoid robots, Cybercab autonomous vehicles, and SpaceX’s planned space-based data centers. To support sensitive lithography and cleanroom operations, the plant will rely primarily on natural gas power plants. The project is expected to create at least 3,000 jobs in Grimes and Brazos counties.