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SpaceX ramps South Texas activity to prepare for 2019 BFR spaceship testing
At the same time as the hardware for SpaceX’s first BFR spaceship is entering the early stages of manufacturing, the company’s South Texas test facility is slowly taking shape after more than 18 months of what can be fairly described as hibernation.
The likeliest location for a near-future spaceship test stand or pad has also experienced a comparatively vast influx of construction workers and general activity that began earlier this month September, nearly two and half years after SpaceX began preparing the unstable coastal wetland with the addition of several hundred tons of soil.
According to a number of posts from local Texans that are also members of a small SpaceX fan group on Facebook, activity around the company’s Boca Chica, Texas facilities has exploded in recent months, and even more so over the last several weeks. SpaceX’s ground tracking facility has harbored the vast majority of attention for some time, particularly following the relatively recent arrival of a massive crane, construction of a shelter for said crane, and the appearance of two massive vacuum-insulated tanks for liquid oxygen (LOX) and liquid methane/natural gas (LNG).
Presently sat beside two large antennae on the Crew Dragon tracking facility’s plot, those propellant tanks are certainly both eye-catching and definitive evidence that something huge and nearby will soon need large quantities of liquid propellant. In the case of the LOX tank, a back-the-envelope estimate suggests that it can hold an obscene 400 metric tons (~900,000 lbs) of liquid oxygen, while the much smaller LNG tank (assumed, not guaranteed) would be capable of holding less than 25,000 kg of liquid methane, thanks mainly to the fact that liquid methane is roughly three times less dense than LOX.
An immense liquid oxygen (LOX) tank just arrived at @SpaceX's prospective Boca Chica, TX facility, likely to be dedicated to BFR & BFS testing. @NASASpaceflight forum user "Nomadd" caught some of the first detailed photos, as well as the tank's arrival at SpaceX land on July 11. pic.twitter.com/hr7SeA6BGw
— Eric Ralph (@13ericralph31) July 12, 2018
Thankfully, SpaceX’s BFR Raptor engines will nominally burn oxygen and methane at a ratio of approximately 3.8 to 1, meaning that every 1 kg of methane exiting the rocket will be accompanied by 3.8 kg of oxygen. The fact that this ratio is actually larger than the density ratio of LOX and LNG means that the propellant tanks can be almost the same size
Most notably, as described above, is the abrupt return of construction and site preparation activities at what once was expected to be a Falcon 9 and Heavy launch pad. Over the last 24+ months, SpaceX has simply let the lot sit, although in this case, that sitting was rather productive. Known as soil surcharging, the site was essentially leveled, loaded with hundreds of tons of soil, plumbed with drainage pipes, and then left alone up to this point to let gravity do the rest of the work. Put simply, the unsteady soil of coastal Texas was aggressively drained and compacted into something stable enough to build expensive, long-term facilities on.
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- BFS seen standing vertically on the pads of its tripod fins. (SpaceX)
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- A view of BFS just after separating from its booster stage. (SpaceX)
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- SpaceX’s much-beloved Boca Chica dirt mount, September 18th. (Julie Smith)
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- SpaceX’s Boca Chica facilities seen on September 8th. (Maria Pointer)
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- SpaceX’s Boca Chica facilities seen on September 19th. Note the two tanks, one for liquid oxygen (left) and the other for liquid methane (right). (Maria Pointer)
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- SpaceX’s Boca Chica facilities seen on September 19th.
The hundreds of truckloads it took to bring in the soil will have to be repeated in reverse, removing most of the same soil to leave a level field ready for foundation-laying and series construction. Heavy machinery and construction contractors began arriving earlier this month, indicating that that process is about to begin, after which construction of the facilities that will eventually support Grasshopper-style spaceship testing can begin in earnest. Those BFR hop tests are scheduled to begin no earlier than late 2019.
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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.”
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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.
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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.
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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.
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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
