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SpaceX to launch Varda Space’s first Rocket Lab-derived ‘space factory’ satellite
Startup Varda Space says it has contracted with SpaceX to launch its first satellite – based on a Rocket Lab bus called Photon – on a Falcon 9 rideshare mission in early 2023.
Founded in late 2020, Varda Space says its mission “is to build the first space factory” – or, to be more precise, the first all-in-one space factory. While far from the commercial orbital laboratory many at NASA would like to paint it as, the joint NASA-Russia International Space Station (ISS) routinely hosts payloads from paying customers, some of which are focused on manufacturing (albeit at an absurdly low volume) materials that can only be made in microgravity (i.e. ‘zero-G’). The products those experiments or miniature factories produce are then returned to Earth on one of SpaceX’s Dragons – still the only spacecraft in existence capable of delivering large amounts of cargo from space to Earth more than a decade after its debut.
This is to say that orbital manufacturing is not exactly a new practice and has been ongoing – at a very, very small scale – for years through companies like Made In Space. What Varda Space wants to do, then, is repeat – and, nominally, expand that ISS-proven model. Rather than launching small experiments or mini-factories to the ISS, where a captive ISS crew is often available to troubleshoot or help maintain them, Varda wants to build its own small satellites with tiny reentry capsules capable of returning up to 100 kg (~220 lb) to Earth.
Two months after the company announced it had raised more than $53 million in funding, Varda Space now says that it will launch the first of its custom-built “space factories” on a Falcon 9 rideshare mission in Q1 2023. In August, Varda revealed that it had contracted with small launch company Rocket Lab to purchase three of its Photon satellite buses – each to serve as a sort of mothership for each Varda-built reentry capsule. Based on Rocket Lab’s successful Electron rocket kick stage, Photon adds solar panels, batteries, avionics, more propellant, and optional propulsion upgrades to create an off-the-shelf satellite bus capable of supporting and powering onboard payloads.
Instead of having to build and qualify their own satellites, Photon thus gives certain customers the opportunity to focus their time and resources on developing the payloads they want to deploy and services they want to operate. No need to reinvent the wheel, in other words. Varda Space appears to be the first company intent on fully taking advantage of that opportunity – and to great effect given that the startup has raised more than $50M less than a year after it was founded.
Additionally, with its SpaceX launch contract, Varda Space has also effectively revealed that Rocket Lab has no clause preventing Photon customers from launching their procured satellite buses on rockets not built by Rocket Lab. While dedicated small satellite launchers like Rocket Lab’s Electron offer some benefits, they do so at a huge premium. While an Electron launch carrying 200 kg (440 lb) to a sun-synchronous orbit (SSO) is believed to cost around $7.5M, a slot on a SpaceX rideshare to a similar (but not as perfectly tailored) orbit would cost the same customer about $1M – practically a magnitude cheaper.
Rocket Lab’s Photon likely costs just a few million dollars and comes by default with a propulsion system capable of refining the spacecraft’s orbit after a one-size-fits-all rideshare launch. That means that manifest a Photon-based satellite on a SpaceX rideshare could likely cut the cost of buying and launching a new satellite in half – and maybe further. The question, then, is whether Varda can take those potentially substantial cost savings and design and manufacture a tiny orbital reentry capsule that’s cheap enough to make its free-flying space factories competitive with the International Space Station (ISS).
Elon Musk has acknowledged that early discussions with Taiwan Semiconductor Manufacturing Company (TSMC) could bring the company into his ambitious Terafab semiconductor project, signaling a possible partnership with the world’s leading contract chipmaker.
Musk confirmed that early talks are underway, but as of right now, they are “just discussions.” There is no confirmation of a deal nor dismissal of the possibility of one, leaving open the prospect of one of the largest advanced-chip collaborations under discussion in the U.S.
@wholemars Just discussions, but something may come of it
— Elon Musk (@elonmusk) October 3, 2026
The report that speculated on potential discussions between Terafab and TSMC comes from Tim Culpan, who outlined a few ways the collaboration could operate. One is TSMC using the project as an “anchor customer” for future facilities in Texas, potentially contributing process expertise, operational know-how, or capacity while Terafab provides capital, long-term purchase commitments, or both.
Tesla and SpaceX jointly developed the Terafab project, with Intel already participating on the tech side. Elon Musk announced the project in March, and it intends to produce more than one terawatt of AI compute capacity annually once fully built.
Company statements place the first phase at approximately $16.8 billion in cost, with later filings pointing to a total that could reach well into the tens of billions across multiple stages.
Intel joined the effort in April 2026 and is expected to supply its 14A manufacturing process for the full-scale plant.
Musk has said existing suppliers, including Samsung and TSMC, remain important for near-term needs; Tesla already has production arrangements with Samsung for AI5 and AI6 chips, but that future demand from Optimus robots, Cybercab vehicles, and planned space-based data centers will eventually exceed what the global industry can currently deliver.
Terafab is positioned as the long-term answer to that projected shortfall, and Tesla did something similar during COVID to avoid a chip shortage. This is just a much larger-scale solution.
If the partnership were to materialize, it would add TSMC’s industry-leading strategies to a project that already combines Tesla’s and SpaceX’s capital and offtake with Intel’s process technology. For now, the only public confirmation is Musk’s brief acknowledgement that conversations are occurring.
Tesla’s early strategy for charging units operating within its Robotaxi fleet reveals that the company surely has not lost any of that scrappy DNA that took it from an unlikely success story to the most valuable carmaker in the world.
An observer at a Tesla Supercharger in Austin spotted ten total Robotaxi vehicles arrive: one Cybercab and nine Model Y units. A Tesla employee was waiting at the lot and allowed each unit to park itself; every car that arrived had nobody in it.
Tesla wins FCC approval for wireless Cybercab charging system
The Tesla employee would walk around and plug each car in, adjusting the parking if needed:
So look at what I found. This is how Tesla charges unsupervised robotaxis at a public supercharger. Here is a driverless Cybercab showing up with no one in it. There are 9 other Model Ys that showed up too. A Tesla employee is walking around and plugging each of them in. She also moves the cars if they are not positioned well enough to charge. I love this process. One person charges multiple robotaxis at once
— Abhimanyu Yadav (@WorldlyReviewer) October 3, 2026
It’s a very interesting strategy, but extremely understandable at this early point in the Robotaxi program. It’s only been out for about 15 months, and Cybercab just entered the fleet in early September.
On top of that, Tesla is still working tirelessly on its wireless charging apparatus, and a new patent was just published regarding that product last week.
However, this is just another example of how Tesla still has plenty of that scrappy DNA leftover from the “production hell” days, when CEO Elon Musk slept on the floor of the factory, employees were working crazy hours, Tesla was building Sprung Structures to build cars in, and the company was tiptoeing on the brink of bankruptcy.
@Teslarati Sheer magnitude of the entire production system is hard to appreciate. Almost every element of production is >75% automated. Only wire harnesses & general assembly, which are <10% of production costs, are primarily manual.
— Elon Musk (@elonmusk) October 12, 2020
For now, Tesla is utilizing a simple system for recharging its ride-hailing vehicles, and that is a Tesla employee doing it manually until another solution presents itself. Sure, it’s not the most high-tech thing, and it certainly is not what people might have expected at this point in time, but it works, and it’s keeping the entire suite running.
Tesla is expanding its Robotaxi service hours by pushing the time back by one hour, keeping the ride-hailing service operational until 11 p.m., one hour later than previously.
CEO Elon Musk confirmed the change and offered a specific reason the expansion has been gradual: the system still needs to reliably avoid small pets that are difficult to see after dark, as they commonly blend into the color of the road, especially when they’re grey.
The latest adjustment restores only a fraction of the operating window the service once held. When paid Robotaxi rides began in Austin on June 22, 2025, vehicles ran from 6 a.m. to midnight.
In September 2025, Tesla lengthened the day to a 2 a.m. close, producing a 20-hour window that stayed in place for most of the following year. By early August of this year, the cutoff had already been pulled back; an August 26 update formalized hours of 6 a.m. to 10 p.m. across Austin and several other markets.
The October move to 11 p.m. therefore leaves the Austin day one hour shorter than the original launch schedule and three hours shorter than the 2025 peak.
Musk addressed the constraint directly after the announcement. “The main thing we’re trying to solve is making sure that we don’t run over pets when they’re hard to see at night,” he wrote. “Literally trying to avoid grey kittens on grey tarmac in the dark.”
Robotaxi operating hours moved from 10pm to 11pm.
The main thing we’re trying to solve is making sure that we don’t run over pets when they’re hard to see at night. Literally trying to avoid grey kittens on grey tarmac in the dark.
— Elon Musk (@elonmusk) October 3, 2026
The example points to a low-contrast perception problem in which a small animal can blend into the road surface under limited lighting.
Tesla’s vehicles rely on cameras and neural-network processing rather than lidar; Musk has previously argued that advanced vision software can extract useful information even in low light by analyzing photon counts, but the pet-detection case remains the stated limiter in later hours.
The modest schedule change arrives alongside faster growth in the purpose-built Cybercab fleet. Texas registration data tracked by observers showed the Austin Cybercab count rising sharply in recent weeks, reaching 169 vehicles after more than 100 were added in a short span.
Tesla has indicated that a broader shift toward 24-hour operation is tied to the upcoming FSD v15 software release expected this month on Robotaxi vehicles. Until that capability is validated for the edge cases Musk described, the company continues to add service time incrementally rather than jumping straight to overnight coverage.
The one-hour extension gives Austin riders a later option for evening trips while the underlying detection work continues.
Elon Musk teases TSMC as potential Terafab partner
Tesla reveals early Robotaxi charging strategy, showing scrappy DNA
