Musk: "Promises Becoming Reality"... Major Investments by Tesla and SpaceX Underway

[Mexico City = Shim Young-jae, Correspondent] Elon Musk agreed that the major business plans of Tesla and SpaceX are transitioning from the announcement stage to actual factories, vehicles, and launch schedules. When a user on X (formerly Twitter) mentioned the expansion of robo-taxis, the unveiling of the Cybertruck, the start of semi production, the production of Optimus, and the commencement of a $100 billion space base, stating that "promises are turning into actual factories, vehicles, and launch schedules," Musk replied, "That's true."

The Street identified the semiconductor production project "TerraFab," jointly pursued by Tesla and SpaceX, as a key initiative among these businesses. The two companies plan to invest an initial $16.8 billion in Grimes County, Texas, and hire at least 3,000 people.

According to The Street, the X post that Musk reacted to listed the expansion of Tesla's robo-taxi fleet, confirmation of the Cybertruck event, the start of semi mass production, the commencement of Optimus production, and plans for the $100 billion space base.

The poster wrote, "Promises are turning into actual factories, vehicles, and launch schedules," adding, "Now the difficult part is scaling this up." Musk responded with "True."

The Street reported that Tesla and SpaceX have entered a phase where large projects previously announced are moving into actual investment, construction, and production schedules, but the process of expanding into large-scale production and operations is the next test.

Initial Investment of $16.8 Billion in TerraFab... Potential for Up to $119 Billion

At the center of the two companies' large-scale projects is TerraFab.

According to The Street, TerraFab AI recently signed a tax-related value limitation agreement for the site in Grimes County, Texas.

SpaceX officially confirmed the site on the 6th of last month and is set to begin construction. Tesla and SpaceX plan to invest $16.8 billion in the initial phase and hire at least 3,000 people.

According to The Street, the $16.8 billion is the officially confirmed phase one investment amount.

However, documents submitted in May indicated that the phase one construction scale could reach up to $55 billion, and if additional phases proceed, the total investment could expand to $119 billion.

Intel to Produce Chips... Tesla, SpaceX, and xAI as Major Customers

Intel will be the company responsible for actual semiconductor production at TerraFab.

According to The Street, Intel will manufacture semiconductors at TerraFab, with Tesla, SpaceX, and xAI as major customers.

TerraFab is designed to integrate logic, memory, packaging, and testing into one facility. The produced semiconductors are expected to be used in Tesla's humanoid robot Optimus and the Cybertruck. The chips will also be used in the space-based data center being developed by SpaceX.

Musk has stated that Tesla will work with SpaceX to develop a one terawatt-scale computing hardware factory, explaining that TerraFab is designed to meet the anticipated future computing demand.

ARK: Long-term Investment May Require $1 Trillion

ARK Invest sees the long-term investment scale of TerraFab as potentially larger. According to The Street, ARK estimates that TerraFab may require a total investment of $1 trillion in the long run.

StockTwits compared this amount to the total weekly highway construction cost in the U.S., which is $704 billion when adjusted for inflation, indicating that it is a larger scale.

The Street reported that this figure shows how much capital Tesla and SpaceX are investing to secure their own semiconductor supply chain.

Tesla and SpaceX already have a commercial trading relationship. According to The Street, Tesla disclosed that it generated $143.3 million in revenue from SpaceX last year, primarily from vehicle sales, including the Cybertruck.

SpaceX to Build $100 Billion Space Base in Louisiana

SpaceX is also pursuing a separate large-scale infrastructure project.

According to CNBC, SpaceX plans to invest $100 billion to construct "Starbase Louisiana" in Vermilion Parish, Louisiana.

This space base, expected to become SpaceX's largest launch facility, is set to begin construction next year, aiming for its first launch as early as 2029.

Upon completion, five launch complexes are expected to be established, each with two launch pads. Facilities for propellant production and employee housing will also be included.

According to The Street, SpaceX's stock rose about 2% following the related announcement.

SpaceX Acquires APR Energy for $1 Billion

Musk also clarified misunderstandings related to a separate acquisition deal by SpaceX.

According to The Street, SpaceX acquired mobile power company APR Energy for $1 billion. Musk stated that because he is the controlling shareholder of SpaceX, the deal is sometimes reported as a personal acquisition, saying, "Strangely, it is reported that I acquired it, but that is not true." He explained that SpaceX is the acquiring entity.

APR Energy operates mobile gas and diesel power generation facilities with a capacity of over 1 gigawatt.

The Street reported that as AI expands, power supply has emerged as a major constraint, and SpaceX has secured a mobile power source.

Tesla and SpaceX Stock Movements Diverge

While the business connections between the two companies are expanding, market evaluations have not been the same.

According to The Street, SpaceX's stock has rebounded significantly from its low in July over the past month.

Tesla has not shown the same level of rebound.

An analyst from Jeffries warned that as expectations related to SpaceX become more closely linked to Tesla's stock price, it may become increasingly difficult to explain Tesla's stock movements based solely on traditional business valuation methods based on vehicle sales or profit margins.

Cybertruck: Price Increases and Decreased Sales

The expansion of large-scale production has also emerged as a challenge for Musk's companies in existing projects.

The Street cited the Cybertruck as a representative example.

When the Cybertruck was unveiled in 2019, a base price of $39,900 and an annual production target of 250,000 units were announced. Currently, the lowest-priced model starts at $74,990.

According to The Street, citing TechCrunch, estimated sales in the U.S. are expected to decrease from about 39,000 units in 2024 to about 20,000 units in 2025.

Semi Annual Production Target of 50,000 Units

Tesla's Semi has also entered the production expansion phase. According to The Street, Tesla's first mass-produced Semi was produced at its Sparks, Nevada plant.

Tesla aims for an annual production capacity of 50,000 Semis. However, analysts cited by The Street expect actual deliveries this year to be between 5,000 and 15,000 units.

There are projections that initial delivery volumes may fall significantly short of the target production capacity during the phased expansion process.

Robo-Taxi Expansion Also a Test

The expansion speed of the robo-taxi business has also been identified as a key variable.

According to The Street, Tesla operates robo-taxi services in several cities, including Austin, Dallas, Houston, Miami, Orlando, and Tampa.

However, the scale of vehicles that do not require driver supervision is still small compared to the goals Musk previously set, according to The Street.

The Cybertruck launch event held in Austin on the 3rd is focused on integrating the new two-seater vehicle into the existing robo-taxi service.

The Street explained that it will be an event to demonstrate whether the Cybertruck can be integrated into actual service rather than a one-time announcement of large-scale vehicle expansion.

Individual Investor Sentiment Also Diverges

Individual investor sentiment on StockTwits has also diverged regarding the two companies.

According to The Street, investor sentiment related to SpaceX has shown weakness, and message activity has been very low. Tesla investor sentiment recorded a neutral level.

The Street reported that the construction of TerraFab, the introduction of the Cybertruck service, the expansion of Semi production, and the commencement of Starbase Louisiana will serve as indicators of whether Musk's large-scale plans are expanding into actual operational scales.

According to The Street, citing TechCrunch, Louisiana authorities expect the Starbase project to create 3,000 direct jobs over ten years, with an average annual salary of $92,600.