News
SpaceX Starship factory aiming to build five megarockets in 2023
CEO Elon Musk says that SpaceX’s South Texas Starship aims to build up to five of the two-stage megarockets in 2023.
SpaceX’s Boca Chica, Texas hardware endeavors began in an empty field in late 2018, kicking off Starhopper testing in 2019. In late 2019 and early 2020, the company began building the bones of the factory that exists today, relying heavily on several giant tents (“sprung structures”) similar to those used by Tesla. SpaceX has already begun the process of replacing those tents with larger, permanent buildings, but two of the original tents continue to host crucial parts of the Starship manufacturing process.
In terms of useful output, that manufacturing slowed down a bit in 2022. That slowdown can likely be partially explained by the need to move equipment and processes into the first finished section of Starfactory. But in general, SpaceX was simply focused on finishing and testing Starship S24 and Super Heavy B7 – both stages of the latest vehicle meant to attempt Starship’s first orbital launch.
Only by late 2022 did Ship 24 more or less complete proof testing, and Booster 7 is still several major tests away from solidifying full confidence in its design. SpaceX has only conducted limited testing with fully-stacked Starships, further reducing the amount of confidence the company can have in the assembled rocket. Lacking the data needed to know with certainty whether the tweaked designs of Starship and Super Heavy are good enough for several orbital test flights, it’s thus unsurprising that SpaceX only produced a handful of usable ships and boosters in 2022.
The update that's rolling out to the fleet makes full use of the front and rear steering travel to minimize turning circle. In this case a reduction of 1.6 feet just over the air— Wes (@wmorrill3) April 16, 2024
But if CEO Elon Musk’s forecast is correct, the company has plans to increase Starbase’s useful output in 2023. According to Musk, SpaceX aims to build “about five full stacks” this year, translating to five flightworthy Starships and five Super Heavy boosters.
In 2022, SpaceX finished Booster 7 and built Booster 8, Booster 9, and most of Booster 10. Booster 8 was almost immediately relegated to the retirement yard. Booster 9, featuring some significant design changes, completed a limited amount of proof testing and returned to the factory in early January – likely for Raptor engine installation. The fate of Booster 10 is unclear, but it stands as a prime example of how fast SpaceX can actually build massive Starship hardware when conditions are right. SpaceX began stacking B10 in late October 2022 and the vehicle is just two stacks away from full height three months later.
In the same period, SpaceX finished and immediately retired Starship S22, finished and began testing Ship 24, finished and began testing Ship 25, and finished stacking Ship 26. Booster 9’s upgrades partially insulate it from the most disappointing possible scenario, retirement before flight. Even if Booster 7 fails during prelaunch testing or its launch attempt, revealing major design flaws, it’s possible that Booster 9’s changes have already addressed those weaknesses, allowing it to continue the flight test campaign. Ship 25’s fate is even more dependent on the fate of Ship 24.
-
In 2022, SpaceX ultimately produced two “full stacks,” with a third (S26/B10) likely to be completed – albeit with a less certain fate – in early 2023. Delivering five full stacks this year – meaning five ships and five boosters that make it far enough to be paired with another and fully stacked – would be a major improvement. However, as was the case in 2022, higher-volume production will remain a risky proposition until the designs of the vehicles being built have been fully qualified.
Given how long it’s taken SpaceX to partially qualify Super Heavy Booster 7, it appears that the largest source of uncertainty will remain for at least another month or two, if not well into mid-2023. Starship production has many uncertainties of its own, and all of them are complicated by not knowing if a Super Heavy booster will be available to launch each new ship in a timely fashion.
Ultimately, an entirely different constraint means that “five full stacks” may be all SpaceX needs to build for the next 12+ months. After a long and painful process, the FAA completed an environmental review of SpaceX’s Starbase, Texas facilities, permitting a maximum of five orbital (full-stack) Starship launches per year. Starship’s FAA orbital launch license, which has yet to be granted, could be even more restrictive. A second Starship pad under construction in Florida is unlikely to be cleared for orbital launches until Starship has proven itself to be moderately safe in South Texas, which could easily take 12-18 months, if not longer.
Combined with the fact that no super-heavy-lift rocket in history has flown five times in its first year of launch activity, a trend Starship seems unlikely to break, SpaceX could practically halt production entirely in 2023 and still have a full year of testing ahead of it while only using Ships 24-26 and Boosters 7, 9, and 10. Unintuitively, that bodes well for a busy 2023 of Starship test flights, as much of the hardware required for three flight tests is already close to completion or almost ready to begin preflight testing.
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
