News
SpaceX, ULA win multibillion-dollar military launch contract years in the making
Ending a process that began almost two years ago, the US Air Force (now Space Force) has selected SpaceX and ULA to be the recipients of a multibillion-dollar series of launch contracts that stretch into the late 2020s.
Known as the National Security Space Launch Phase 2 Launch Services Acquisition (LSA), the US Air Force publicly began the initiative in Q4 2018. In May 2019, the LSA process was opened to bidders and the military ultimately received serious proposals from SpaceX, the United Launch Alliance (ULA), Northrop Grumman, and Blue Origin.
While the latter three companies proposed their respective next-generation rockets – still in development – to complete at least a dozen military launches from 2022 to 2027, SpaceX offered up Falcon 9 and Falcon Heavy. As of April 2020, Falcon 9 officially usurped ULA’s Atlas V rocket to become the United States’ most prolific operational rocket. While ULA has technically included Atlas V as a backup option in its NSSL Phase 2 bid, the company’s primary launch vehicle is Vulcan Centaur, scheduled to fly for the first time no earlier than July 2021.
As a result, failing to award SpaceX at least one of the two NSSL LSA Phase 2 slots – split 60:40 – would have almost assuredly made a farce of the US military competition. The real question, then, was who would win the other award, and whether the US military would shock the industry with a final decision more technical than political. As previously discussed on Teslarati, the fact that four separate companies submitted serious bids for Phase 2 gave the US military a significant opportunity.
“For dubious reasons, the US Air Force (USAF) has structured the NSSL Phase 2 acquisition in such a way that – despite there being four possible competitors – only two will be awarded contracts at its conclusion. The roughly ~34 launch contracts up for grabs would be split 60:40 between the two victors, leaving two competitors completely empty handed.”
Teslarati.com — August 14th, 2019
Despite repeated petitions by Blue Origin and the attempted intervention of lawmakers in Congress, the US military remained ardently against awarding Phase 2 launch contracts to more than two providers throughout the competition. Barring a successful protest from snubbed bidders Northrop Grumman and/or Blue Origin, it appears that the military ultimately won the battle, selecting two providers.
Instead of awarding even just a handful of the 34 launch contracts up for grabs to Northrop Grumman, the US Space Force is all but guaranteeing that the company’s Omega rocket will die in the cradle without an immediate slew of additional military contracts. There’s a chance that NSSL Phase 1 LSA funding will continue, likely giving NG the money it needs to complete Omega’s development, but that’s far from guaranteed.
Funded entirely out of Jeff Bezos’ pocket, Blue Origin’s ambitious New Glenn reusable rocket is more insulated from a lack of US military contracts and the company could also continue to receive several hundred million dollars as part of an LSA Phase 1 award. For Blue Origin, already set on entering New Glenn into the commercial launch market, military funding could ensure that the company does the extra work needed to certify the rocket and its production facilities for military launches.
Down the road, that means that the US Air Force, Space Force, or National Reconnaissance Office (NRO) could all feasibly award Blue Origin or Northrop Grumman launch contracts outside the 34 Phase 2 missions without having to start a development and certification process that can take a year or more from scratch.
Regardless of the missed opportunities, the NSSL LSA Phase 2 contract is a major win for SpaceX and guarantees the company’s Falcon 9 and Falcon Heavy rockets some 13-14 military launch contracts over a five-year period. For ULA, the victory is likely a massive relief, given that the company’s next-generation (expendable) Vulcan Centaur rocket has next to no chance of sustaining itself with commercial launch contracts. Much like Atlas V in the last decade of the rocket’s life and Delta IV over most of its two-decade career, ULA’s Vulcan rocket will continue the trend of relying almost exclusively on US military contracts.
This time around, however, the US military’s preferential treatment of ULA is nakedly obvious. At almost every turn, SpaceX’s Falcon 9 and Falcon Heavy rockets can provide the same launch services as ULA for anywhere from 20-50% less. For the few missions (direct to geostationary) where ULA’s Atlas V, Delta IV, and Vulcan rockets might actually have a step up over SpaceX, the US could have easily awarded ULA the smaller 40% share or even split that 40% share with Blue Origin or Northrop Grumman, giving SpaceX the lion’s share and likely saving hundreds of millions of dollars – if not $1B+ – over the next seven years.
Instead, business (more or less) as usual will continue for at least another decade as the US military functionally subsidizes ULA’s existence by prioritizing a more expensive rocket to achieve the same outcome. The first LSA Phase 2 launches are currently scheduled to begin no earlier than (NET) 2022.
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Investor's Corner
New drone video shows Tesla’s Optimus Factory reaching a turning point
New drone footage shows Tesla’s dedicated Optimus factory steel frame nearing completion at Giga Texas.
Tesla’s dedicated Optimus factory at Gigafactory Texas is closing in on a finished steel frame, according to drone footage posted Thursday afternoon by longtime site observer Joe Tegtmeyer. In the video, Tegtmeyer said structural steel assembly is now about five column grids away from reaching the building’s north perimeter beam, putting the primary skeleton in its final stretch roughly six months after Tesla broke ground on the North Campus site in late March.
The Giga Texas Optimus Factory latest update … construction keeps moving fast!
Steel assembly is now only about 5 column grids from the north perimeter beam. Concrete is going in on the three upper floors, rebar is still being laid for more pours, and footing / grade-beam work… pic.twitter.com/qvFPvwnYzW
— Joe Tegtmeyer 🚀 🤠🛸😎 (@JoeTegtmeyer) September 17, 2026
Tegtmeyer’s footage shows concrete already going in on three upper floors while crews continue laying rebar and pouring grade beam footings at ground level. That kind of parallel work, steel rising at one end of the site while concrete sets at the other, is a scheduling approach Tesla used at the original Giga Texas building and appears to be repeating here to save time before the plant’s targeted 2027 production start.
Teslarati has tracked the building’s progress since Tesla confirmed construction was officially underway in May, when the first steel structure went up on what was then bare, reclaimed land. The facility is part of a more than 5.2 million square foot expansion of Giga Texas’s North Campus that Tesla has said will eventually run nearly the length of the existing vehicle factory, over 4,000 feet, while sitting somewhat narrower. Musk has pegged the long term output target at 10 million Optimus units a year once the line is running at full capacity, a volume that would dwarf the one million unit pilot line Tesla is standing up separately at its Fremont, California factory.
Tesla Giga Texas to feature massive Optimus V4 production line
The Texas facility sits alongside another major buildout on the same campus. Terafab, the joint Tesla and SpaceX chip fabrication plant that will eventually supply the silicon running Optimus units in the field. Housing robot assembly and chip production on the same grounds is a deliberate supply chain decision, cutting down on the shipping and lead time that would otherwise sit between the two.
Tesla has not given an updated timeline beyond its previously stated goal of bringing high volume Optimus production online at the site in the summer of 2027. Fremont’s smaller pilot line began mass producing the current Gen 3 robot in January, with that plant expected to build tens of thousands of units this year primarily to generate the real world data Tesla needs to refine the robot’s software before Giga Texas ramps up. Six months of visible construction progress, tracked almost entirely through Tegtmeyer’s recurring drone flights, gives the clearest outside look yet at how seriously Tesla is treating that 2027 deadline.
Investor's Corner
Tesla and SpaceX take “Terafab” Trademark fight to Federal Court
Tesla and SpaceX sue a small Illinois firm after cease and desist letters over Terafab.
Tesla and SpaceX are asking a federal judge to rule that their planned Terafab chip factory does not infringe a small Illinois company’s trademark, a request that arrives only after months of quiet negotiation broke down this summer.
The dispute traces to May 18, when Tesla filed three U.S. trademark applications for “Terafab” and “Tesla Terafab,” covering semiconductor chips and related chip making services. TERA-print LLC, a nanotechnology company that has held a federal trademark for “Tera-Fab” since 2021, responded five days later with a cease and desist letter. According to the lawsuit, first reported by Reuters, TERA-print argued that Tesla and SpaceX’s use of “Terafab” would confuse consumers familiar with its own trademark, which covers a desktop photolithography printer sold to researchers for sensor and bioengineering work.
What stands out in the filing is the timing of TERA-print’s own paperwork. One day before sending that cease and desist letter, on May 22, TERA-print applied to expand its existing registration to cover semiconductor materials, silicon chips, nanoelectronic devices and AI design services, categories it had not previously claimed. Tesla and SpaceX call that filing opportunistic in their complaint, noting it arrived two months after Tesla’s public Terafab announcement and just days after Tesla’s own trademark applications went in.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
By June 10, TERA-print was threatening to sue for federal trademark infringement, false designation of origin and unfair competition, the complaint states. Rather than wait to be sued, Tesla, SpaceX and SpaceXAI met with TERA-print six separate times between June and August trying to resolve the dispute directly. Those talks collapsed, and the companies filed for declaratory judgment this week in the U.S. District Court for the Western District of Texas, asking a judge to find that “Terafab” does not infringe TERA-print’s mark before TERA-print can file a claim of its own.
TERA-print isn’t backing down. The company told PCMag it discussed a settlement with Tesla as recently as September 2 and feels misled by what it called Tesla’s professed interest in settling. Its CTO, Andrey Ivankin, said TERA-print holds a Defense Department contract to fabricate semiconductors and partially owns Mattiq Inc., an AI company built on TERA-print’s products, and that the company will vigorously defend its rights.
Tesla and SpaceX argue the overlap is superficial. Terafab is planned as a $16.8 billion complex spanning roughly 100 million square feet at the Grimes County site SpaceX confirmed last month, built to produce chips for Optimus robots, Tesla’s AI computing needs and SpaceX’s orbital data center ambitions, a scale and purpose the companies say no reasonable consumer would confuse with a tabletop lab printer. TERA-print’s product line has stayed focused on lithography tools for biological and sensor research since it registered its mark in 2021.
The trademark fight is the second legal dispute tied to the Terafab project in the past week, following a separate SpaceX suit aimed at keeping company records about the facility out of public view, as KBTX reported. Whether construction proceeds under the Terafab name now depends on a federal judge in Austin.
News
NHTSA just escalated its Tesla Cybercab investigation in a big way
NHTSA escalated its Cybercab audit into a sworn Special Order with a September 30 deadline.
Federal regulators have moved from asking Tesla questions about its Cybercab to demanding sworn answers. The National Highway Traffic Safety Administration issued a Special Order that requires a Tesla officer to sign an affidavit attesting to the completeness of the company’s responses, with a deadline of September 30.
The order builds on Audit Query AQ26002, which NHTSA opened on September 3, the same day Tesla began commercial Cybercab service in Austin. Teslarati covered that initial inquiry when it surfaced, noting the agency wanted to understand how Tesla certified a vehicle with no permanently attached steering wheel, pedals, or mirrors as compliant with Federal Motor Vehicle Safety Standards. A Special Order is a different tool and converts a fact finding review into a legally enforceable demand, the same mechanism NHTSA used against Tesla in 2023 during its Autopilot investigation.
Several of the 21 requests target a specific gap in Cybercab’s design. One asks whether Tesla used temporarily attached human controls at any point to help certify the vehicle, and if so, which standards depended on that equipment being present. Another quotes an existing rule directly: “The service brakes shall be activated by means of a foot control.” Cybercab has no foot pedal. NHTSA wants a detailed explanation of how the vehicle satisfies that requirement, and how it complies without the kind of exemption granted to Zoox in July under Part 555, the regulatory pathway built for steering wheel free vehicles.
The order does not claim Cybercab is unsafe or that Tesla broke a rule. It requires Tesla to explain, under oath, the reasoning behind decisions the company already made when it self-certified the vehicle. That distinction matters, but so does the exposure. Motor1’s reporting, summarized here, put potential civil penalty exposure as high as $139 million if NHTSA later finds the certification was flawed, on top of whatever criminal risk comes with a false sworn statement.
Tesla has not said publicly how it plans to respond. Cybercab is still carrying passengers in Austin through the Robotaxi app while the September 30 deadline approaches, and the company has continued expanding the vehicle’s footprint even as the regulatory question remains open. The Special Order does not pause any of that and just sets a date by which Tesla has to put its certification logic on the record, with a company officer’s name attached to it.
New drone video shows Tesla’s Optimus Factory reaching a turning point
Tesla and SpaceX take “Terafab” Trademark fight to Federal Court
