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Morgan Stanley explains why Tesla’s first ‘Terafactory’ will be a perfect fit for Texas
Morgan Stanley analyst Adam Jonas believes that Tesla’s newest electric vehicle production facility will land in Texas. In an investor’s note on Monday, the analyst gave six key reasons for why he believes Texas will be Tesla’s newest home.
The upcoming facility is expected to be dedicated for the production of the Cybertruck, which will require a different manufacturing system compared to Tesla’s previous cars. The factory will be massive, and in the first quarter earnings call, Musk even mentioned that the Gigafactories will probably be referred to as “Terafactories” soon.
Following are Morgan Stanley’s reasons why Texas may very well be the site of the Cybertruck’s “Terafactory.”
Tesla’s need to join other manufacturers in states
Jonas recognizes that Tesla is the only Original Equipment Manufacturer (OEM) to have its main production facility in California. While Michigan has long been the home of the American automotive market, Tesla has called California home since its early days. Tesla is as much of a technology company as it is a carmaker, and technology lives in Silicon Valley.
However, Jonas sees unique disadvantages in having the main production facility located in CA. Concerning location and logistics, vehicle delivery times are extended for those who do not live in the western portion of the United States. Tesla owners who live on the East Coast are subjected to longer wait times for their vehicles due to transit and logistics delays. This is one of the main reasons a production facility that is centrally located in the country would be advantageous, Jonas says.
Texas has a hearty automotive manufacturing employment rate
Texas ranks fourth out of all fifty U.S. States in automotive manufacturing. This statistic comes from the US Department of Labor. Not only could Tesla increase its production rate as a company, but it could also provide a sizable economic boost by offering automotive production employment in a state that already has the enthusiasm for building vehicles.
Texas’ relaxed labor union representation fits Tesla’s bill
Jonas believes Tesla would prefer to operate in a state with a labor union representation that is not as heavy. Texas is a right-to-work state, where labor costs are affordable. Considering that the facility will be responsible for producing Tesla’s first pickup, the Cybertruck, along with the Model Y crossover, the workload will require a hefty workforce. Tesla will likely be looking to save where it can in a state that won’t break the company’s budget, and in Texas, The cost of doing business is significantly less than California, Jonas said.
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Texas is a hotspot for renewable energy
Jonas recognizes Tesla’s identification as an “integrated renewable energy generation, storage, and transportation company.” Tesla would likely prefer a state with an abundance of renewable solar energy that could sustainably drive its manufacturing operations. Texas is a state with a warm and sunny climate, making it perfect for solar energy. The Morgan Stanley analyst noted that the state’s predictable climate and weather outlook would be beneficial to Tesla.
Elon Musk’s SpaceX holds its operations in Boca Chica, Texas
SpaceX has held its operations in Boca Chica, Texas since 2012. While its main rocket facility is in Hawthorne, California, Boca Chica is where SpaceX chooses to launch some of its rockets. The site first launched a rocket on April 5, 2019. However, Jonas seems to believe that Musk’s comfortability with Texas and SpaceX could extend to Tesla. “Synergies in management time and, over time, possibly increased cooperation between Tesla and SpaceX make Texas an appealing option for the next U.S. Giga,” Jonas wrote.
Tesla’s presence in the heart of U.S. Oil and Gas is “symbolic”
Jonas and other Morgan Stanley investors said that U.S. lawmakers and the public might see a “symbolic and, in many ways, well-timed” investment by Tesla in Texas. The state has long been the heart of the United States’ oil and natural gas industry, and a sustainable energy company moving into Texas could be a hint toward the inevitable transition to clean energy.
While Tesla CEO Elon Musk has mentioned that the newest production facility is going to end up in the Central United States, there has been confirmation that Texas is indeed the definite the landing spot for the upcoming facility. However, Musk did use a Twitter poll to test the waters of Texas’ acceptance as the location of the newest factory, and the results were positive.
Both Musk and CFO Zachary Kirkhorn mentioned that the new production facility could be the company’s largest plant yet, hinting that it might be called a “Terafactory” instead. There is no indication of when Tesla will announce the facility’s final location. Still, Texas certainly seems like a very good fit for the Cybertruck facility.
Elon Musk
The Boring Company’s newest tunnel vehicle runs on Tesla parts and no one is driving it
The Boring Company’s new tunnel vehicle runs on Tesla Model 3 batteries and drive units.
The Boring Company just introduced a new piece of hardware, and it runs on parts pulled straight from a Tesla showroom. Liner Truck 3, unveiled in a post from the tunneling company’s official X account, is an all electric vehicle built around Tesla Model 3 battery packs and drive units, purpose built to move concrete tunnel segments to the boring machine face without a single person underground.
Introducing Liner Truck 3 — our latest fully electric tunnel vehicle.
– Tesla Model 3 battery and drive units
– Transports 22,000+ lb of concrete segments to the boring machine
– 28 miles of range
– 12 mph max operating speed
– Remotely piloted from Global OCC in Texas, with… pic.twitter.com/XB7FgSXnpy— The Boring Company (@boringcompany) August 7, 2026
The job itself is unglamorous but critical. Each precast segment run weighs more than 22,000 pounds, roughly the load of a full cement mixer, and Liner Truck 3 hauls that weight repeatedly between the surface staging area and wherever the Prufrock machine happens to be cutting.
The Boring Company said Liner Truck 3 is piloted remotely out of its Global Operations Control Center in Texas, extending the Zero-People-In-Tunnel approach the company has spent years building toward. An earlier version of a ZPIT liner truck was already tested at the company’s Bastrop, Texas research tunnels, and a factory tour released last month showed an employee flying a fully loaded liner truck with a PlayStation controller. Liner Truck 3 looks like the production version of that same idea, cleaned up and pushed into daily use.
The timing lines up with a company digging in more places than it ever has before. The Boring Company now has multiple Prufrock machines active or arriving in Nashville, where Music City Loop construction has been accelerating since February, and its Vegas Loop network keeps adding tunnel mileage on a near monthly basis. Every one of those projects depends on getting concrete segments to the cutting face fast enough to keep the boring machine from idling, which is exactly the bottleneck Liner Truck 3 is designed to remove.
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It also reinforces something Tesla owners have watched happen gradually across Musk’s companies: passenger car hardware finding a second life in heavy equipment. Model 3 drive units already move people through the Vegas Loop, and now the same components are hauling concrete underground in Nashville and wherever The Boring Company digs next. Whether that kind of component reuse extends further into TBC’s equipment lineup, or into other Musk owned industrial hardware, is the next thing worth watching.
SpaceX stock did the opposite of what most of Wall Street expected this week, when the day designed to be its most dangerous turned into a rally, and the rally kept going.
Thursday marked the first major lockup expiration since SpaceX’s June IPO, making roughly 911.5 million insider held shares eligible to trade for the first time, more than doubling the company’s public float. Analysts and short sellers had spent weeks bracing for a flood of selling, especially after the stock fell 13 percent following its first earnings report as a public company on Tuesday. Instead, shares rose 6.1 percent Thursday to close at $114.92, and by Friday they were trading near $129, up more than another 12 percent on the day.
SpaceX shorts get warned by Musk ally, echoing Tesla’s early struggles
The setup made the outcome notable. Short interest had climbed to roughly 34 percent of the float heading into earnings, among the highest of any large cap stock, with about 95 percent of available shares to borrow already on loan. CEO Elon Musk warned short sellers twice in the weeks before the lockup, writing on X that “the survival probability of firms who maintain a significant short position in SpaceX over time is very low,” then following up on the morning of earnings with “I try to warn them, but they just double down.”
When the newly unlocked shares hit the market and the selloff never showed up, some of that short position appears to have started unwinding. TipRanks reported that options activity shifted toward bullish strategies like put selling and risk reversals following the rally, with roughly $600 million in options premium trading Thursday alone. Retail buyers also stepped in during the earnings dip, according to Vanda Research.
The fundamentals behind the stock have not changed much in a week. SpaceX’s revenue nearly doubled year over year to $7.8 billion, with Starlink subscribers doubling to 12 million and the company’s AI segment growing 247 percent. What spooked investors on Tuesday was the spending side. Capital expenditures jumped to more than $18 billion for the quarter, up from $2.8 billion a year earlier, with AI investment alone rising from $749 million to $15.8 billion. Wall Street remains split on whether that spending is building infrastructure SpaceX needs or outrunning what the business can currently support, a debate Teslarati has tracked since shares first came under pressure.
None of that resolves the bigger question hanging over the stock. Thursday’s release was only the first of nine staggered lockup tranches, with roughly $800 billion worth of additional shares scheduled to become eligible through October, and Musk’s own stake stays locked until next June. If this week is any indication, the market is treating that supply as something it can absorb rather than something to fear, at least for now.
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News
The Boring Company’s newest Vegas Station has a permit quietly waiting behind it
Sahara Las Vegas opened a new Vegas Loop station, joining an exclusive two resort transit club.
Sahara Las Vegas opened a new Vegas Loop station Thursday, giving The Boring Company’s underground transit system its northernmost stop yet on the Strip. The station sits at Sahara’s Paradise Road entrance, on the southeast corner of Las Vegas Boulevard and Sahara Avenue, and connects riders to the Las Vegas Convention Center, other Strip resorts on the network and, eventually, Harry Reid International Airport.
The addition makes Sahara the second resort, after Fontainebleau opened its own station in January, to get a stop built at street level rather than tucked into the property itself. Sahara now joins Westgate as the only two Strip resorts offering both a Vegas Loop station and a stop on the Las Vegas Monorail, giving guests two separate ways to get around without leaving the property.
The Boring Company just doubled its tunneling power in Nashville
The bigger news buried in Thursday’s announcement is what comes next. Boring Company has already secured its first permit to tunnel north of Sahara Avenue, extending the network beyond where it currently ends, even though permits to push the Loop toward downtown Las Vegas still haven’t been granted. Crews are also working on a two mile dual tunnel line running from Westgate to a planned station at 4744 Paradise Road, just north of Tropicana Avenue, that Las Vegas Convention and Visitors Authority CEO Steve Hill has said the company hopes to open in time for November’s Las Vegas Grand Prix.
Ridership has grown alongside the buildout. The Loop moved roughly 82,000 passengers during CONEXPO in early March, a total the company highlighted on its own X account at the time, and the system has now carried more than 4 million passengers through 11 open stations since it began running in 2021. The airport connector tunnels, meant to give the Loop a direct link to Harry Reid, have slipped past their original first quarter target and remain under construction, with Boring Company director Mike Baier saying that a full opening is still a few months out.
For Sahara, the calculation is straightforward. Convention traffic drives a large share of Loop ridership, and a station at the property’s front door gives conventiongoers one more reason to book rooms on the Strip’s north end instead of closer to the convention center itself.
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The Boring Company’s newest tunnel vehicle runs on Tesla parts and no one is driving it
Elon Musk and SpaceX shrugs off the trading day Wall Street feared most
