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SpaceX’s recent Starship testing challenges don’t worry Elon Musk
In his latest burst of tweets, SpaceX CEO Elon Musk says he isn’t all that worried about a duo of recent Starship prototype failures and talked next steps for the next few Starships.
Aside from SpaceX’s South Texas rocket factory, Musk also touched on progress being made on the cutting-edge Raptor engine set to power Starships and their boosters, revealing a small production milestone in the process. The CEO says that SpaceX has already begun building its 26th Raptor engine, a sign that Raptors may actually be waiting on Starships in a turn of events. Back when SpaceX was busy testing its low-fidelity Starhopper testbed, the ship actually had to wait several months for the full-scale Raptor engine’s design to mature enough to support 15-30+ second hop tests.
Now, Musk’s Raptor SN26 reveal implies that SpaceX is slowly but surely ramping up production of the new engine back at its Hawthorne, California headquarters.
From August to December 2019, SpaceX completed one Raptor engine every ~17 days, on average. With Musk’s confirmation that SpaceX is currently building (or already testing) SN26, the company is completing an engine every 12-14 days – an overall improvement of 20-40%. In other words, SpaceX’s growing engine production capacity is almost perfectly positioned to support a fleet of suborbital Starship prototypes, which is about where the company’s Boca Chica, Texas factory is today.
Obviously, following two recent full-scale Starship prototype failures spaced barely a month apart, rocket production has a ways to go before it will need the volume of Raptor engines SpaceX appears to already be capable of producing. For the time being, three Raptor engines – having already completed production in Hawthorne and acceptance testing in McGregor, Texas – are quite literally sitting around and gathering dust as they wait for the first Starship prototype qualified to host them.
Once a Starship passes proof testing, SpaceX will be able to install either one or all three engines for an inaugural static fire test, following by a small Starhopper-class hop (no higher than 150m or 500 ft).
However, once SpaceX has explored the full range of testing available to suborbital Starship prototypes, things will change. Likely ending with the first one or several successful ‘skydiver-style’ rocket landing tests, SpaceX will finally be able to seriously think about its first orbital flight tests. To reach orbit and still be capable of returning to Earth and landing softly, Starship will need a Super Heavy booster – set to be the largest rocket booster ever developed by a large margin.
Although Musk has stated that early orbital flight tests will likely launch with far fewer engines, a single Super Heavy booster could eventually require 37 Raptor engines – a full 42% more engines than SpaceX has managed to build in the entire 15+ month history of full-scale Raptor production.
Thankfully, SpaceX’s engine production HQ likely has at least 6-12 months to ramp up production to support fully-outfitted Super Heavy boosters – let alone several. For the time being, each suborbital Starship only needs 3 sea level-optimized Raptor engines, although it’s possible that SpaceX will eventually perform suborbital tests with a full compliment of six engines – including three with much larger vacuum-optimized nozzles.
Ultimately, Musk explained that his lack of concern about recent Starship prototype failures – potentially including any anomalies that follow SN4’s test campaign – comes from the fact that he believes that producing Starships is a much more challenging and pressing concern. Indeed, if your factory can churn out functioning building-sized spacecraft for pennies on the dollar, losing a few during testing is little more than an annoyance. The first failed prototypes can thus be considered learning experiences, helping SpaceX improve designs and optimize the factory and production strategies. SpaceX does still need to prove that its existing approach really can build functioning rockets, but that should (in theory) come with enough trial and error.
Depending on how initial tests go with Starship Serial Number 4 (SN4), likely days away from wrapping up production, Musk says that the first few suborbital Starship tests will likely involve short, low-velocity hops. Those flights will be slow enough that the ship (or ships) wont require aerodynamic control surfaces to complete them, instead relying entirely on smaller thrusters and the thrust vector control (TVC) provided by their three main Raptor engines.
If Starship SN4 testing – including wet dress rehearsals, Raptor static fires, and short hops – goes perfectly, Musk says that Starship SN5 could be the first new ship to have fully-functional flaps installed. If things don’t go quite as well, that milestone could shift to Starship SN6, while SN7 and beyond are obviously on the table in the event of even less forgiving SN4/SN5 testing scenarios. For now, Starship SN4 could be ready to move to the launch pad and kick off a series of critical proof tests a handful of days from now.
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’
