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SpaceX Starship prototype in limbo after engine test lights rocket on fire
The fate of SpaceX’s fourth full-scale Starship prototype appears to be in limbo after a third (seemingly successful) engine ignition test unintentionally caught the rocket on fire.
Now more than 12 hours after Starship SN4 fired up its new Raptor engine, the ~30m (~100 ft) tall, 9m (~30 ft) wide prototype is apparently trapped with one or both of its propellant tanks still partially filled with liquid (or gaseous) methane and/or oxygen. An initial road closure scheduled from noon to 6pm local quickly came and went and SpaceX and Cameron County Texas have since modified the paperwork, extending the closure a full 24 hours. In other words, SpaceX has reason to believe that Starship SN4 may continue to be unsafe (i.e. pressurized) as many as ~30 hours after it technically completed its third static fire test – extremely unusual, to say the least.
There’s only one obvious conclusion to draw. Whether it was something invisible to the public eye or damage related to the off-nominal fire that burned for some 15 minutes after Raptor shut down, SpaceX appears – to some extent – to have lost control of Starship SN4.
At the moment, it’s unclear what is wrong and what SpaceX is attempting to do to resolve the problem. Based on photos of Starship SN4 taken before the fire, there is good news and bad news from what can be publicly ascertained. Controlled from the ground by unprotected wires strung up and down the rocket and connected at its base, the uncontrolled fire that burned in at least two locations around Starship’s aft may have severed some or all of those critical connections.
That would render Starship – potentially perfectly healthy and operational – almost entirely uncontrollable, while also potentially removing SpaceX’s access to telemetry. In other words, the company may currently have no idea how pressurized all or part of Starship SN4 is and may also have little to no control of some or all of the rocket. For that to be true, Starship SN4 would, however, have to have less than fully redundant control hardware. To perform hops, for example, the ship would need both wired and radio links capable of sending telemetry and receiving commands to remain both on the ground and after liftoff.
It’s possible that Starship SN4 has the necessary hardware installed but that it wasn’t activated for the static fire test (think “Starship will never leave the ground, why would we need to enable wireless controls?”). It’s also possible that the blown pipe and methane leak that appeared to cause the secondary fire damaged crucial propellant management hardware (valves, pumps, etc.) or was just a symptom of an even worse overpressure event that damaged or destroyed multiple such systems.
Given that safety is almost certainly the priority, chances are that some combination of fairly mild hardware failure and telemetry/control loss has left SpaceX with just enough uncertainty that it can’t risk sending technicians to the launch site to inspect the damage and reestablish control. As a result, the only option left is to quite literally sit and wait until it’s once again safe to approach the rocket. Thankfully, at this point, the risk of the mystery problem actually destroying Starship SN4 is very low. If, as it appears, only its methane tank is affected, leaving some unknown quantity of latent liquid methane trapped inside, it’s possible that waiting will actually solve the problem and safe the rocket.
The fact that Starship hasn’t exploded yet strongly implies either that the amount of propellant trapped is minuscule or that the vast majority of SN4’s propellant management systems (including vents) remain functional. Assuming that’s the case, any remaining cryogenic propellant will eventually boil into gas, increasing the pressure inside Starship’s tanks, while those tanks will continue to vent to prevent an explosion or rupture. Eventually, Starship SN4 will be empty once again and SpaceX will be able to approach the rocket to regain control and begin inspections and repairs.
Regardless, after such an unintentionally eventful static fire test, it’s extremely unlikely that SN4 will be ready for its inaugural flight test within the next few days. Stay tuned for updates as SpaceX works to regain control over the fourth full-scale Starship prototype.
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Tesla CEO Elon Musk posted a photo of himself standing with the Optimus production team inside Tesla’s Fremont factory, arms crossed amid workers in hard hats and safety vests. The image captures a pivotal industrial shift: the same facility space once dedicated to building Tesla’s flagship Model S sedan and Model X SUV is now home to the company’s humanoid robot manufacturing line.
Walking the Optimus production line in Fremont pic.twitter.com/ABS0tuRibW
— Elon Musk (@elonmusk) July 1, 2026
Tesla’s Fremont Factory, acquired in 2010 from the former NUMMI joint venture between Toyota and GM, has been the company’s original U.S. manufacturing hub since Model S production began in 2012.
The Model X followed soon thereafter. These premium vehicles offered lower annual volumes, recently around 30,000 combined, compared to the high-volume Model 3 and Model Y lines that continue around the site. Over their combined run, the S and X accounted for roughly 610,000 units.
In late January 2026, during Tesla’s Q4 2025 earnings call, Elon Musk announced the end of Model S and Model X production in Q2 2026. The final vehicles rolled off the line in early May. Rather than retooling for another vehicle, Tesla chose to convert the dedicated S/X assembly area into a dedicated Optimus Gen 3 production line.
Model 3 and Y manufacturing remains unaffected. Tesla’s official Fremont Factory page now lists Optimus alongside the 3 and Y as core products.
The conversion was executed with remarkable speed. After production stopped, crews dismantled the existing vehicle line and installed entirely new modular equipment—including lines sourced from Germany and dozens of sub-lines for actuators, batteries, and other components—in roughly four months.
Musk described the timeline as “insanely fast,” noting it would be unprecedented for any other manufacturer. Initial Optimus output is expected to ramp slowly due to the robot’s roughly 10,000 unique parts and the brand-new production processes involved. The Fremont line targets an eventual capacity of 1 million Optimus units per year.
Tesla isn’t joking about building Optimus at an industrial scale: Here we go
Optimus Development Timeline
- August 19, 2021: Optimus (then called Tesla Bot) formally announced at Tesla’s first AI Day. A concept video showed a person in a suit demonstrating the vision for a general-purpose humanoid capable of dangerous, repetitive, or boring tasks using the same AI architecture as Full Self-Driving.
- 2022: Early prototypes displayed. At the second AI Day in September, semi-functional units demonstrated walking across a stage and basic arm movements
- 2023: September videos showed improved capabilities, including sorting colored blocks, precise limb awareness, and holding a Yoda pose.
- 2024-early 2025: Factory integration videos showed Optimus navigating workspaces and handling objects like battery cells.
- January 2026: Gen 3 mass-production activities began at Fremont, with reports of over 1,000 Gen 3 units already operating inside the factory for real-world learning and AI training
- April 2026: Musk confirms Optimus production on converted Fremont line would begin in late July or August 2026. The Gen 3 reveal, originally eyed for Q1, was pushed closer to production start. A second, much larger Optimus factory at Giga Texas is under construction, with volume production targeted for Summer 2027 and long-term capacity of 10 million units annually
- July 1, 2026: Musk’s on-site visit and team photo confirm the Optimus line is operational and the transition is actively progressing
Tesla positions Optimus as potentially its largest project ever, leveraging vertical integration, AI expertise, and car-like manufacturing know-how to scale humanoid robots first for its own factories and later for broader industrial and consumer use.
The Fremont conversion serves as a critical proving ground for this ambitious new chapter in Tesla’s already-rich history.
Investor's Corner
Tesla gets its latest short from Michael Burry: ‘Happy it jumped back to this level’
Tesla short seller Michael Burry, the subject of the film “The Big Short,” where he was portrayed by Steve Carell, has revealed he has opened a new bet against the stock.
In a new update to his Substack newsletter in a post titled “Trading Post June 30, 2026,” Burry revealed a new set of bets against Tesla, Caterpillar, NVIDIA, Applied Materials Inc., and the iShares Semiconductor ETF.
In regard to Tesla, Burry wrote:
“And finally I shorted Tesla at 416.22. Happy it jumped back to this level.”
This means Burry likely opened his new short position after the company’s recent rally on Wall Street, which saw Tesla shares sink in mid-May, only to recover to well over the $400 mark. Currently, shares trade at around $427.
The company saw a big Tuesday as shares climbed considerably, over 10 percent. The size of the Tesla short was not provided, nor did Burry give any information on the position’s structure, the number of shares, dollar value, or whether options were used in the short.
The Tesla and SpaceX merger everyone is talking about is quietly building
Over the years, Burry has been one of the more vocal critics of Tesla, calling its share price “media inflated,” and saying it was “ridiculously overvalued” as recently as December.
The company has largely transitioned away from being known as an automotive company and instead is much more widely regarded as an AI play, mostly due to its Full Self-Driving efforts, Optimus robot development, and data collection related to both.
This has not pulled those skeptics away from being vocal about their distaste for how Tesla is valued, but there’s no denying that the company is a global force in many things, including sustainable energy, automotive, and AI.
Wedbush Securities is initiating stock coverage on SpaceX (NASDAQ: SPCX), marking the first comments on the company since it went public several weeks ago. Wedbush and its analyst handling coverage, Dan Ives, are widely bullish on fellow Musk company Tesla (NASDAQ: TSLA).
Ives wrote his first note initiating coverage of SpaceX shares on Wednesday with a $190 price target and an ‘Outperform’ rating. The firm believes the company is well positioned off of its IPO because of its wide array of projects, including AI compute power and infrastructure, connectivity projects, and launches.
“We view SpaceX as one of the most differentiated assets within the tech market with a strong footprint across its three core markets, with Starlink driving success with connectivity,” Ives wrote, “Starship launches leading to a demand flywheel and increasing deal flow for its Colossus clusters.”
Elon Musk called it Epic: The full story of SpaceX’s Starship Flight 12
Wedbush leans heavily on Starlink, which they say is the “profitability driver given the strength of its recurring revenue base of ~12 million subscribers as of June 5th.” Ives believes Starlink is still in the “early innings” of penetrating the global telecommunications and broadband market, as it only holds less than a 1 percent share. However, this number is sure to increase over time.
It also highlights the importance of Starship, which it says is an “essential layer” of SpaceX’s overall success. SpaceX developing and displaying the ability to reuse rockets is a major cost and reliability advantage “as it reduces the necessary hardware launch costs while generating a feedback loop for future flights to improve their launch flight rate without accelerating capex spend.”
Finally, SpaceX’s recent AI/Compute projects are also very elementary, Ives writes. It is worth mentioning Wedbush said its $190 price target is derived from a valuation forecast that sees the company yielding roughly $2.48 trillion of implied enterprise value.
There are also some factors that Wedbush did not take into account with its initial coverage. The firm wrote in the note:
“We note that there is optional value coming from Starship’s accelerating scale towards sub-$200/kg unit economics, orbital data centers, and enterprise AI monetization as these factors could drive meaningful upside but these face major hurdles, so we do not take that into account with our valuation.”
SpaceX shares are down just over 2 percent today, trading at around $167 at the time of publication.
Tesla Optimus project fires up as Musk sees production line progress
Tesla gets its latest short from Michael Burry: ‘Happy it jumped back to this level’
