News
SpaceX set to finish three Starship prototypes in the same month
SpaceX appears to be on track to complete its third Starship prototype in a month just days after the company finished testing a new steel tank and at the same time as it prepares to roll another full-scale ship to the launch pad.
Postponed by several weeks after the (fleeting) success of the Starship serial number 4 (SN4) prototype, violently destroyed by a minor testing mishap on May 29th, SpaceX’s fifth full-scale Starship tank section (SN5) could roll to an adjacent testing facility at any point in the next few days. In fact, SN4’s successor has likely been ready to begin tank proof and static fire testing for several weeks since it was stacked to its full height on May 12th. SN4 rolled to the launch pad on April 23rd and remained SpaceX’s top Starship priority until its demise more than a month later.
As it turns out, the explosion that destroyed the ship also launched a ~25 metric ton (~55,000 lb) counterweight installed a few days prior some 100m (300+ ft) into the air, where it proceeded to fall back to earth and obliterate the steel mount Starship SN4 sat on. The loss of that pad hardware necessitated its own several-week delay but SpaceX appears to be nearly done installing and outfitting replacements as of June 18th – an incredible turnaround given the scale and complexity of everything involved. Of course, the whole purpose of those rapid repairs is to get back to the business of testing Starships as quickly as possible.
SN5
Initially expected as early as 8am local on June 17th, Starship SN5’s trip to the launch pad has been a long time coming. Completed around May 20th after approximately a month of concerted effort, the ~30m (100 ft) tall tank departed SpaceX’s Vehicle Assembly Building (VAB) for the first on June 13th, although it was quickly moved back inside as technicians simultaneously worked to complete Starship SN6.
Previously scheduled to become the first Starship to reach its full height with the installation of a functional nosecone, SN5 will likely pick up where SN4 left off, instead. That process will effectively be no different, albeit sans nosecone, starting with ambient and cryogenic proof (pressure) tests and eventually moving to one or several static fires with either one or three Raptor engines. Testing the quick disconnect umbilical port that caused SN4’s demise will also likely be a priority. If all goes according to plan in that first week or two of tests, SpaceX may finally be ready to launch a full-scale Starship prototype for the first time, performing a 150m (~500 ft) hop test with SN5.
However, since CEO Elon Musk first discussed plans for an initial 150m hop test, SpaceX received a surprise suborbital launch license from the FAA, rather than the limited experimental permit most expected. That license effectively allows SpaceX to perform an unlimited number of Starship tests as long as the trajectory follows the administration’s strict safety guidelines and remains suborbital. Unless SpaceX’s ~150m target was based in some technical limitation, the sky is quite literally the limit for a more ambitious flight debut if the company believes Starship SN5 can handle it.
SN6
In the event that Starship SN5 follows its predecessor into a less early (but still early) grave, SpaceX thankfully won’t have to wait long at all to continue its hardware-rich test program. When Starship SN5 first departed the VAB on June 13th, it did so to give SpaceX room to finish Starship SN6, placing its aft engine section on a stand inside the building and stacking the upper two-thirds of the ship’s tank on top.
Several days to a week or more of internal and external work remain to fully mate the two Starship SN6 sections, but the vast majority of its assembly is now behind SpaceX. SpaceX continues to refine its methods with each successive prototype, gradually producing Starships that are getting closer and closer to the ideal finished product. There’s a chance that, unlike Starship SN4, SN5 can be modified with the installation of a nosecone and flaps to support more ambitious 2-20 km (~1.2-12 mi) flight tests if it makes it over the 150m hurdle unscathed but if not, SN6 could become the first Starship to have a nosecone installed.
SN7
Last but absolutely not least, SpaceX recently built a new Starship test tank for the first time since March. While stouter than an actual Starship-class methane or oxygen tank, this particular test tank is maybe only 25% shorter than the methane tanks installed on Starship prototypes. According to Musk and effectively confirmed by writing all over the prototype, this particular test tank – formerly Starship SN7 – was built to determine if a different kind of steel could be preferable for future ships.
Shortly after the June 15th test began to wind down, Musk announced that the new material (304L stainless steel) had performed quite well, reaching 7.6 bar (110 psi) before it sprung a leak. The fact alone that it sprung a leak instead of violently depressurizing is already a major sign that 304L is preferable to 301L, as it means that Starships built out of it could fail much more gracefully in the event of a leak instead of collapsing or violently exploding. A step further, SpaceX has already managed to repair the leak on SN7 and will likely test the tank again in the next few days.
Meanwhile, Musk says that a second improved 304L test tank is already on its way, after which SpaceX will likely attempt to build and test the first fully-304L Starship prototype. Further down the line, SpaceX intends to develop its own custom steel alloy, optimized specifically for Starship’s needs. The first tests of that ’30X’ alloy could begin as early as August 2020 according to a February Musk tweet.
-
Check out Teslarati’s Marketplace! We offer Tesla accessories, including for the Tesla Cybertruck and Tesla Model 3.
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
