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EXCLUSIVE: Tesla Cybertruck battery packs to be built at Fremont Factory
Tesla plans to start building battery packs for the upcoming Cybertruck on a new cell manufacturing line in the Fremont factory, people with knowledge of the project told Teslarati.
In August, we reported that Tesla had filed to build a new battery manufacturing equipment line on the second floor of the Fremont factory. This filing, which was submitted to the City of Fremont on August 30, relates to the module portion of the line, Tesla said.
Tesla described the project as “CTA Battery B-Build,” the filing shows.
Credit: City of Fremont
Tesla is ultimately planning to build the Cybertruck in Austin at Gigafactory Texas. However, battery cells and cell pack manufacturing are not yet ready to take off at the new Tesla plant, which is located just outside Austin. Tesla applied to build a battery and cathode manufacturing building at Gigafactory Texas earlier this year, and while the project has been started, it likely will not be ready for the Cybertruck’s projected launch in mid-2023.
With an extensive order log that features over 1 million total reservations, Tesla is preparing for Cybertruck manufacturing by building the battery packs at a plant that is already operational. The Fremont facility, the only Tesla plant manufacturing all four vehicles the company builds, was ultimately chosen for the task of kicking off Cybertruck pack manufacturing, Teslarati confirmed with sources familiar with the matter.
Cybertruck Battery Pack Manufacturing will start in Fremont
Sources familiar with the matter told Teslarati the second-floor manufacturing line that Tesla filed to build in August will manufacture the Cybertruck packs. Tesla will take the 4680 battery cells produced at the Kato Road facility or another previously utilized cell design manufactured at Gigafactory Nevada and put them into modules and packs that are manufactured on the new Fremont battery line.
Currently, the line is being completed by construction crews on site, who are making daily progress. Additionally, Tesla engineers are installing automation equipment to produce the Cybertruck battery packs.
Tesla did not immediately respond to our request for comment.
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Kicking Cybertruck Module Production into “Plaid Mode”
Tesla is also working hard to kick off Cybertruck pack production as time is extremely limited. Tesla has a series of vehicles, referred to as “carriers,” which transport batteries throughout the factory. The company recently ordered around 300 new carriers for the factory as cell and battery pack manufacturing is set to ramp drastically.
The sources also said the Cybertruck battery pack line is currently being tested with Tesla’s automation equipment. Tesla is working to ramp the line quickly as Cybertruck vehicle manufacturing is planned for next year at Gigafactory Texas.
2023: The Year of the Tesla Cybertruck?
Tesla is set to build the Cybertruck at Gigafactory Texas. After unveiling the all-electric pickup in 2019, Tesla has delayed initial production on several occasions due to supply chain issues and other challenges.
“In 2022, supply chain will continue to be the fundamental limiter of output across all factories,” Musk said during Tesla’s Q4 and 2021 Full Year Earnings Call in January. So the chip shortage, while better than last year, is still an issue. And, yeah, so that’s — there are multiple supply chain challenges.”
Musk went on to say that the challenges would delay the launch of any new products in 2022. “We will, however, do a lot of engineering and tooling, what not to create those vehicles: Cybertruck, Semi, Roadster, Optimus, and be ready to bring those to production hopefully next year. That is most likely.”
Although Tesla is planning to begin deliveries of the Semi on December 1, all other projects have been effectively delayed until next year, but preparation to launch those projects is evidently a priority within the factories.
4680 cells are not constrained but are they going into the Cybertruck?
Tesla’s Vice President of Powertrain Drew Baglino detailed earlier this year that the company was not constrained in terms of 4680 battery cell availability.
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“So throughout 2021, we focused on growing cell supply alongside our in-house 4680 effort to provide us flexibility and insurance as we attempt to grow as fast as possible,” Baglino said on the Q4 and Full Year 2021 Earnings Call in January. “4680 cells are not a constraint to our 2022 volume plans based on the information we have.”
What Baglino said next on the call likely indicates what Tesla was preparing the Cybertruck for: pack manufacturing at Fremont, shipping the packs to Texas, and then installing them into vehicles:
“But we are making meaningful progress of the ramp curve in Kato. We’re building 4680 structural packs every day, which are being assembled into vehicles in Texas. I was driving one yesterday and the day before. And we believe our first 4680 vehicles will be delivered this quarter.”
The Kato Road facility has supported Tesla’s 4680 cell needs thus far. The 4680 packs were installed on some Gigafactory Texas-built Model Ys, and were reviewed by Munro Live earlier this year. Fremont will likely support Cybertruck pack manufacturing for some time, utilizing cells from Kato Road and from suppliers like Panasonic when they ultimately being manufacturing the battery for Tesla.
As Cybertruck manufacturing ramps up into late 2023, 2024, and beyond, packs will then be at Fremont and Gigafactory Texas, which would likely entirely support Cybertruck production.
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Elon Musk
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Elon Musk told SpaceX staff AI revenue will soon dwarf rockets and Starlink combined entirely.
Elon Musk told SpaceX employees this week that artificial intelligence, not rockets, will soon carry the company’s revenue. In a roughly 29 minute internal address posted on SpaceX’s X account on Tuesday, Musk said AI revenue will pass every other line of business at SpaceX “probably in September” and pull further ahead by the fourth quarter.
The numbers he gave are specific. SpaceX currently runs 1.4 gigawatts of AI compute capacity. Musk wants that at 10 gigawatts by the end of 2027, a jump he tied directly to revenue: “if we bring 10GW of AI online by the end of next year, it will be $300 billion to $500 billion a year in revenue.” He called those “big numbers,” which undersells a projection larger than what most countries produce in a year.
We made rockets reusable and are rebuilding the internet in space. The next challenge: making life multiplanetary and understanding the true nature of the universe
Watch @ElonMusk deliver a company update to @SpaceX employees pic.twitter.com/5c8rxoCQfu
— SpaceX (@SpaceX) August 11, 2026
Musk went further on where AI fits into SpaceX’s future. “Probably in four or five years, AI will be 99% of the value of SpaceX,” he told staff, adding that digital intelligence would eventually run “a trillion times” ahead of biological intelligence as computing scales. He tied that growth to the company’s founding mission, telling employees “we must win on AI, because the future is overwhelmingly AI and robots,” with the payoff meant to help fund Starship and a Mars program that increasingly runs through Terafab, the joint Tesla, SpaceX and xAI chip plant.
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
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None of this is entirely new territory. SpaceX told investors much the same story during its first earnings call as a public company on August 4, where Musk moved the company’s $1 trillion revenue target up a year to 2030 and said Starlink could someday carry a majority of the world’s internet. What the all hands video adds is a hard deadline and a specific power figure Musk had not given publicly before, along with a franker pitch to his own workforce that AI, not launch cadence, is now the thing SpaceX is betting its future on.
The AI revenue itself is not coming from SpaceX training its own models. It is largely Starlink acting as the network layer for xAI’s workloads, plus SpaceX renting out compute capacity directly, the same approach behind the roughly $16 billion the company spent on AI infrastructure in a single quarter.
Musk closed the video with a pitch aimed at recruiting and retention rather than investors, telling employees that anyone who helps SpaceX win the AI race will eventually get the chance to go to the moon or Mars themselves. Whether SpaceX can turn 1.4 gigawatts into 10 in seventeen months is the more immediate question, and one that will show up in quarterly numbers well before anyone leaves Earth.
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.”
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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.
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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.
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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.
SpaceX’s next trillion dollar bet has nothing to do with rockets, Musk tells staff
Tesla has one big financial question to answer for investors: Morgan Stanley
