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SpaceX, NASA moving forward with plans to build second Dragon launch pad
SpaceX and NASA officials have confirmed that they are moving forward with plans to modify the company’s second Florida launch pad to support Crew and Cargo Dragon missions.
First reported by Reuters in June 2022, SpaceX began studying the possibility of modifying its Cape Canaveral Space Force Station (CCSFS) LC-40 pad for Dragon missions earlier this year after NASA raised concerns about the risks posed by plans to operate its next-generation Starship rocket out of the only pad available for Dragon. Three months later, the partners have committed to that plan and, according to SpaceX, hardware for the required modifications is already in work.
After a false-start in 2019 and 2020, SpaceX began rapidly constructing Starship’s first Florida launch site at the LC-39A pad it leases from NASA’s Kennedy Space Center (KSC) earlier this year. Thanks to a series of modifications and additions to existing Space Shuttle infrastructure, Pad 39A is also the only site currently capable of launching Crew and Cargo Dragon spacecraft on Falcon 9 rockets. Located just 1000 feet (~300 m) east of 39A’s existing Falcon and Dragon launch facilities and access tower, Starship is unlikely to have much of an impact during nominal operations, but the program does have a history of building prototypes that occasionally explode.
Until late 2023 at the absolute earliest, SpaceX’s Crew Dragon is the only spacecraft capable of sustaining NASA’s presence (typically 4-5 astronauts) at the International Space Station (ISS). Years behind schedule, Boeing’s Starliner crew capsule is scheduled to attempt its first crewed test flight (CTF) no sooner than February 2023. Starliner’s first operational astronaut transport mission could then follow in September 2023, but it could easily slip into 2024 if the CTF is less than flawless. To date, both of Starliner’s uncrewed test flights have uncovered significant issues that required months of additional work to rectify.
When a Falcon 9 rocket exploded at LC-40 in 2016, causing damage that effectively required a total rebuild, it took SpaceX 15 months to resurrect the pad. In other words, if a Starship launch failed and destroyed Pad 39A’s Falcon and Dragon facilities at some point within the next 12-18 months, it could easily threaten NASA’s ability to maintain the ISS if Boeing was unable to take over.
Even though SpaceX would never risk launching Starship out of Pad 39A if it knew there was a high risk of the new rocket failing and harming Dragon operations, NASA is in the business of ensuring that contingencies exist in case of unlikely but catastrophic events. It doesn’t matter if Starship probably won’t explode or if Starliner will probably be ready to take over. The risk is always there and SpaceX and NASA must be ready for the possibility.
Nothing is known about the nature of the modifications that LC-40 will require. But more likely than not, NASA will require SpaceX to develop something similar to Pad 39A’s facilities. That would involve building a new crew access tower, crew access arm, escape system (39A uses baskets and ziplines), and an on-site bunker for astronauts.
Given that the need for a backup Dragon launch pad comes largely at NASA’s behest, there’s a good chance that the agency will require that that backup be in place before SpaceX will be allowed to launch Starship out of Pad 39A. Earlier this month, CEO Elon Musk delayed his estimate for the first Florida Starship launch from late 2022 to Q2 2023. It’s highly unlikely that SpaceX will be able to finish modifying LC-40 by Q2 2023.
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SpaceX will have to undertake the already challenging, time-sensitive construction project on a high-security military base and well within the blast radius of the single most active launch pad in the world. Much of the custom hardware required could have significant lead times, further extending the construction timeline. Unless SpaceX is willing to seriously constrain LC-40’s launch cadence, which would likely make its goals of 60+ launches in 2022 and up to 100 Falcon launches in 2023 impossible, the work will take even longer than it would under ordinary circumstances.
In a new note to investors on Tuesday, Morgan Stanley analyst Andrew Percoco said that Tesla has one big financial question to answer for investors regarding its Robotaxi rollout, Full Self-Driving software, and Optimus.
Percoco said in the note that, for the most part, investors are still very positive about the direction the company is headed. However, there are some things the firm would like to see, and they have to do with financials.
Tesla (TSLA) Q2 2026 earnings results: miss on EPS, beat on revenue
Tesla bulls are more than convinced that the company’s Full Self-Driving software is proof it can develop physical AI. Financially, however, there are still some questions, especially on elevated spending, which CEO Elon Musk said would occur as the company works to roll out Robotaxi faster and continue developing its Optimus robot.
The latter two are where Tesla will have to prove progress to investors, as Percoco writes that both projects “will require clearer evidence that Robotaxi is scaling and more tangible Optimus proof points to support the ROI on elevated capex.”
Percoco said the second quarter earnings call did not change his long-term thesis of where Tesla is positioned in the AI race, which is out in front. However, there are concerns that weaker gross margins and higher R&D spend will stress financials, and that has “sharpened our (and investors’) focus on measurable progress across Robotaxi and Optimus.”
Additionally, Robotaxi still needs to be proven with more operation in existing cities while maintaining safety but improving how many rides it gives in any given time, he said. For Optimus, Percoco wrote that he is “still looking for evidence beyond commentary around SOP.”
Morgan Stanley put Percoco in charge of covering Tesla after long-time analyst Adam Jonas transitioned to the automotive side.
Currently, Morgan Stanley has a $415 price target on Tesla and a ‘Hold’ rating on the stock. It is trading at around $330 at the time of publication, which was 2:30 P.M. on the East Coast.
SpaceX’s massive investment in AI will make it a big winner, Argus Research said after the company’s successful earnings call last week.
The firm also upgraded shares to a Buy from Hold and set a $160 price target.
SpaceX (NASDAQ: SPCX) is currently recovering from its heavy AI infrastructure investments, as it spent nearly $16 billion in Q2 alone. The company did this primarily by monetizing high-demand GPU compute capacity at a much faster pace than traditional data center economics would suggest.
Company CFO Bret Johnsen said that SpaceX would be able to pay back anything on new deployments within a year.
There are plenty of ways the company can do this:
Leasing excess compute capacity through contracts
SpaceX has already built Colossus and Colossus II, largely for its own model training. However, much of that capacity is already rented out to third parties. It already has major deals with Anthropic, Google, and Reflection AI. These partnerships are adding billions per month to SpaceX’s spreadsheet.
High utilization driven by industry-wide scarcity
The demand for advanced AI training and inference capacity continues to exceed what is available for use. SpaceX can fill new racks quickly after they come online, so the capital deployed converts into revenue with minimal idle time.
Additionally, management and outside observers have described the new compute capital as behaving more like a cost-of-goods-sold than traditional multi-year capex, especially because of this rapid monetization pattern.
Capacity has already scaled from ~0.4 GW a year to 1.4 GW annually by the end of Q2. There are targets of more than 2 GW by year-end.
High incremental margins on the rental business once capacity is online
GPU cloud providers often operate at strong gross margins. SpaceX can monetize capacity that was already partially built or can be added efficiently. This means that incremental EBITDA margins on the rental revenue are usually high. This accelerates cash recovery relative to the gross capital outlay.
Parallel monetization of its own AI software and applications
Beyond pure infrastructure rental, SpaceX also generates revenue from Grok through subscriptions and usage, from X through ads, data, and other related services, enterprise APIs, and the planned integration of the Cursor coding tools acquisition.
These application layers ride on the same compute infrastructure and provide additional high-margin streams that could offset build-out costs. AI-segment revenue overall rose sharply to about $2.6 billion in Q2, according to Motley Fool. This was driven primarily by the infrastructure contracts, but the software side is also partially responsible.
Efficient, large-scale deployment and vertical integration advantages
SpaceX has emphasized the rapid construction of power and cooling infrastructure and favorable cost-per-megawatt economics relative to industry benchmarks in some disclosures.
Combined with its ability to scale capacity aggressively and the fact that many contracts start generating revenue within months of capacity coming online, the effective payback compresses dramatically compared with more conventional multi-year data-center projects.
SpaceX’s dominant near-term recovery path will turn the AI clusters into a hyperscale-style compute rental business for other leading AI companies while still using a portion for internal models.
Tesla headlights have caused a recall of over 20,000 of the company’s two most popular vehicles, the Model 3 and Model Y, due to the low-beam bulb exceeding the maximum allowed intensity according to federal standards.
Tesla initiated the recall with the National Highway Traffic Safety Administration (NHTSA) this morning, stating that the low-beam output “exceeds the maximum allowed intensity in the outer upper-right and outer upper-left areas of the 10U and 90U zone, as prescribed in FMVSS No. 108.”
Tesla sourced the impacted headlights from Marelli Automotive Lighting, a Mexico-based company. The recall impacts 2020-2023 Model Y vehicles and 2017-2023 Model 3 vehicles. It is estimated that every VIN in this recall is impacted by the defect.
🚨 Tesla is recalling 20,349 2020-23 Model Y vehicles and 2017-23 Model 3 vehicles due to an excessively bright headlamp low beam.
Currently, there is no remedy plan in place, as it is still being developed. pic.twitter.com/y34cIO2U0B
— TESLARATI (@Teslarati) August 11, 2026
Typically, Tesla would remedy recalls of this nature through an Over-the-Air software update, which has been a major focus of criticism by the company and its supporters because the NHTSA still refers to it as a “recall,” even though it requires no action by the vehicle owner. The fix is shipped over the internet and downloaded to the car.
However, there appears to be a potentially different solution for this problem. Tesla has not developed a remedy for this issue, so it could potentially be on the way. The big issue appears to be the fact that these recalled lamps are out of production, and this is an old body style for both vehicles. The headlights and front-end designs are completely different.
Tesla switched to another supplier when the affected headlight design was discontinued. It plans to begin notifying owners of their remedy options by September 15.
Tesla filed a petition protesting the recall to fix the vehicles’ headlight issue, but the NHTSA denied it. Now, Tesla will come up with a solution to fix it.
Tesla has one big financial question to answer for investors: Morgan Stanley
SpaceX AI investment gamble will make it a big winner, firm says
