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SpaceX scraps first Starship prototype to make way for new and improved rockets
A bit less than a month after SpaceX’s first full-scale Starship prototype was partially destroyed during testing, the damaged rocket has been almost completely scrapped to make way for new and improved Starships.
On November 20th, SpaceX effectively tested the Starship Mk1 – the first full-scale prototype – to destruction, pressurizing the rocket’s tank section (lower half) until it quite literally popped its top. The pressure wave that failure created damaged almost every internal component of the massive vehicle, all but guaranteeing that SpaceX would have to scrap the vehicle and move on to new prototypes.
Those future prototypes will take advantage of the many, many lessons learned from Starhopper’s two test flights and several additional grounded tests, as well as the many learning experiences presented through Starship Mk1’s pathfinder manufacturing, assembly, and test campaign. As is SpaceX’s signature, the company is choosing to learn by building actual hardware and making the inevitable mistakes that come hand in hand with such an eccentric and ambitious program.
Above all else, SpaceX is trying to redefine the minimum infrastructure needed to build high-performance launch vehicles at a scale comparable to or even larger than NASA’s Saturn V, the largest rocket ever successfully launched. Modern rockets like Falcon 9 and Atlas V are built in relatively clean and environmentally-controlled environments and Saturn I and V – while quite a bit less sterile – were at least built inside large hangar-like facilities.
With Starship, SpaceX instead wants to build rockets even larger than Saturn V out in the elements and with a far more common (and thus affordable) workforce, (theoretically) made possible in large part thanks to its extensive use of stainless steel. Case in point, Starhopper – a low-fidelity Starship test bed – was quite literally welded together on the South Texas coast by welders far more familiar with building water towers. While not without its teething pains, Starhopper proved to be incredibly sturdy and resistant to anomalous behavior and successfully performed two separate flight tests in July and August 2019.
Three months after Starhopper’s second and final hop test, SpaceX’s Starship Mk1 tank section – the lower half of the rocket – was moved to the launch site and began a series of tanking tests. The first few tests were completed successfully and focused on searching for leaks with a neutral cryogenic liquid (likely liquid nitrogen). After the majority of those leaks were sealed, SpaceX moved into liquid oxygen load testing a few days later. For unconfirmed reasons, it turned out that that first liquid oxygen pressure test would also be Starship Mk1’s last.
On November 20th, SpaceX pressurized Starship Mk1 to its limits, with almost all of the visible creases and wrinkles in its steel surface visibly smoothing out as the supercool liquid oxygen caused frost to form on the exterior. Ultimately, SpaceX pushed the vehicle beyond its limits and its uppermost tank dome quite literally popped off of Starship’s tank section, whether the overpressure event was intentional or unexpected. The force of that overpressure event essentially sent a shockwave through Starship, crushing and warping its two remaining tank domes and transfer tubes like an aluminum soda can.
In simpler terms, very few parts of Starship Mk1 escaped unharmed, all but guaranteeing that it would not be worth the effort to repair it. Instead, SpaceX has almost entirely scrapped the prototype over a period of two weeks. According to an official statement released shortly after Mk1’s failure, SpaceX will attempt to recover and reuse as much of Mk1 as it can and those few salvageable parts will be added to an entirely new prototype, deemed Starship Mk3.
Although it’s disappointing that Starship Mk1 was unable to perform any kind of Raptor engine testing, let alone flight tests, it’s safe to say that the pathfinder prototype has been well worth the time and effort it took to build. Regardless of flight or engine testing, a ton of Mk1’s value lies in its utility as a hands-on, physical testbed for SpaceX employees to perform experiments and learn how to build steel rockets – and build them outside in less than friendly weather conditions.
SpaceX is in the midst of rapidly expanding its presence in Boca Chica, Texas, including a new launch control center, an expanded landing and launch pad, new production facilities, and more. The company has also just begun churning out numerous monolithic (single-weld) steel rings that will likely become part of Starship Mk3 in the near future. It will likely be several months before that next-generation prototype is as close to completion as Starship Mk1 was, but it should be well worth the wait and well worth its predecessor’s sacrifice.
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Tesla has announced it has hit a major milestone with Full Self-Driving subscriptions, shortly after it said it would exclusively offer the suite without the option to purchase it outright.
Tesla announced on Wednesday during its Q4 Earnings Call for 2025 that it had officially eclipsed the one million subscription mark for its Full Self-Driving suite. This represented a 38 percent increase year-over-year.
This is up from the roughly 800,000 active subscriptions it reported last year. The company has seen significant increases in FSD adoption over the past few years, as in 2021, it reported just 400,000. In 2022, it was up to 500,000 and, one year later, it had eclipsed 600,000.
NEWS: For the first time, Tesla has revealed how many people are subscribed or have purchased FSD (Supervised).
Active FSD Subscriptions:
• 2025: 1.1 million
• 2024: 800K
• 2023: 600K
• 2022: 500K
• 2021: 400K pic.twitter.com/KVtnyANWcs— Sawyer Merritt (@SawyerMerritt) January 28, 2026
In mid-January, CEO Elon Musk announced that the company would transition away from giving the option to purchase the Full Self-Driving suite outright, opting for the subscription program exclusively.
Musk said on X:
“Tesla will stop selling FSD after Feb 14. FSD will only be available as a monthly subscription thereafter.”
The move intends to streamline the Full Self-Driving purchase option, and gives Tesla more control over its revenue, and closes off the ability to buy it outright for a bargain when Musk has said its value could be close to $100,000 when it reaches full autonomy.
It also caters to Musk’s newest compensation package. One tranche requires Tesla to achieve 10 million active FSD subscriptions, and now that it has reached one million, it is already seeing some growth.
The strategy that Tesla will use to achieve this lofty goal is still under wraps. The most ideal solution would be to offer a less expensive version of the suite, which is not likely considering the company is increasing its capabilities, and it is becoming more robust.
Tesla is shifting FSD to a subscription-only model, confirms Elon Musk
Currently, Tesla’s FSD subscription price is $99 per month, but Musk said this price will increase, which seems counterintuitive to its goal of increasing the take rate. With that being said, it will be interesting to see what Tesla does to navigate growth while offering a robust FSD suite.
News
Tesla confirms Robotaxi expansion plans with new cities and aggressive timeline
Tesla plans to launch in Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas. It lists the Bay Area as “Safety Driver,” and Austin as “Ramping Unsupervised.”
Tesla confirmed its intentions to expand the Robotaxi program in the United States with an aggressive timeline that aims to send the ride-hailing service to several large cities very soon.
The Robotaxi program is currently active in Austin, Texas, and the California Bay Area, but Tesla has received some approvals for testing in other areas of the U.S., although it has not launched in those areas quite yet.
However, the time is coming.
During Tesla’s Q4 Earnings Call last night, the company confirmed that it plans to expand the Robotaxi program aggressively, hoping to launch in seven new cities in the first half of the year.
Tesla plans to launch in Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas. It lists the Bay Area as “Safety Driver,” and Austin as “Ramping Unsupervised.”
These details were released in the Earnings Shareholder Deck, which is published shortly before the Earnings Call:
🚨 BREAKING: Tesla plans to launch its Robotaxi service in Dallas, Houston, Phoenix, Miami, Orlando, Tampa, and Las Vegas in the first half of this year pic.twitter.com/aTnruz818v
— TESLARATI (@Teslarati) January 28, 2026
Late last year, Tesla revealed it had planned to launch Robotaxi in Las Vegas, Phoenix, Dallas, and Houston, but Tampa and Orlando were just added to the plans, signaling an even more aggressive expansion than originally planned.
Tesla feels extremely confident in its Robotaxi program, and that has been reiterated many times.
Although skeptics still remain hesitant to believe the prowess Tesla has seemingly proven in its development of an autonomous driving suite, the company has been operating a successful program in Austin and the Bay Area for months.
In fact, it announced it achieved nearly 700,000 paid Robotaxi miles since launching Robotaxi last June.
🚨 Tesla has achieved nearly 700,000 paid Robotaxi miles since launching in June of last year pic.twitter.com/E8ldSW36La
— TESLARATI (@Teslarati) January 28, 2026
With the expansion, Tesla will be able to penetrate more of the ride-sharing market, disrupting the human-operated platforms like Uber and Lyft, which are usually more expensive and are dependent on availability.
Tesla launched driverless rides in Austin last week, but they’ve been few and far between, as the company is certainly easing into the program with a very cautiously optimistic attitude, aiming to prioritize safety.
Investor's Corner
Tesla (TSLA) Q4 and FY 2025 earnings call: The most important points
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Tesla’s (NASDAQ:TSLA) Q4 and FY 2025 earnings call highlighted improving margins, record energy performance, expanding autonomy efforts, and a sharp acceleration in AI and robotics investments.
Executives, including CEO Elon Musk, discussed how the company is positioning itself for growth across vehicles, energy, AI, and robotics despite near-term pressures from tariffs, pricing, and macro conditions.
Key takeaways
Tesla reported sequential improvement in automotive gross margins excluding regulatory credits, rising from 15.4% to 17.9%, supported by favorable regional mix effects despite a 16% decline in deliveries. Total gross margin exceeded 20.1%, the highest level in more than two years, even with lower fixed-cost absorption and tariff impacts.
The energy business delivered standout results, with revenue reaching nearly $12.8 billion, up 26.6% year over year. Energy gross profit hit a new quarterly record, driven by strong global demand and high deployments of MegaPack and Powerwall across all regions, as noted in a report from The Motley Fool.
Tesla also stated that paid Full Self-Driving customers have climbed to nearly 1.1 million worldwide, with about 70% having purchased FSD outright. The company has now fully transitioned FSD to a subscription-based sales model, which should create a short-term margin headwind for automotive results.
Free cash flow totaled $1.4 billion for the quarter. Operating expenses rose by $500 million sequentially as well.
Production shifts, robotics, and AI investment
Musk further confirmed that Model S and Model X production is expected to wind down next quarter, and plans are underway to convert Fremont’s S/X line into an Optimus robot factory with a capacity of one million units.
Tesla’s Robotaxi fleet has surpassed 500 vehicles, operating across the Bay Area and Austin, with Musk noting a rapid monthly expansion pace. He also reiterated that CyberCab production is expected to begin in April, following a slow initial S-curve ramp before scaling beyond other vehicle programs.
Looking ahead, Tesla expects its capital expenditures to exceed $20 billion next year, thanks to the company’s operations across its six factories, the expansion of its fleet expansion, and the ramp of its AI compute. Additional investments in AI chips, compute infrastructure, and future in-house semiconductor manufacturing were discussed but are not included in the company’s current CapEx guidance.
More importantly, Tesla ended the year with a larger backlog than in recent years. This is supported by record deliveries in smaller international markets and stronger demand across APAC and EMEA. Energy backlog remains strong globally as well, though Tesla cautioned that margin pressure could emerge from competition, policy uncertainty, and tariffs.
Tesla hits major milestone with Full Self-Driving subscriptions
Tesla confirms Robotaxi expansion plans with new cities and aggressive timeline
