Connect with us

News

Morgan Stanley explains why Tesla’s first ‘Terafactory’ will be a perfect fit for Texas

The Cybertruck in off-road conditions. (Photo: humdinger_3d/Instagram)

Published

5 years ago

on

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.

Advertisement

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.

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.

Advertisement

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.

Related Topics:

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

Advertisement
Comments

Elon Musk

Tesla’s Robotaxi expansion wasn’t a joke, it was a warning to competitors

Tesla might have made a joke with its first Robotaxi service area expansion, but it was truly a serious warning to its competitors.

Published

55 minutes ago

on

July 14, 2025

By

Tesla’s Robotaxi expansion occurred for the first time on Monday, and while the shape of its new service area might be “cocky,” it surely is not a joke. It’s a warning to competitors.

Robotaxi skeptics and Tesla opponents are sitting around throwing hate toward the company’s expansion appearance. Some called it “unserious,” and others say it’s “immature.” The reality is that it has a real meaning that goes much further than the company’s lighthearted and comical attitude toward things.

For context, Tesla has routinely used the number 69 as a way to price things it sells. 420 is another, an ode to cannabis culture. A few years back, it actually priced its Model S flagship sedan at $69,420. The first rides of the Robotaxi fleet were priced at $4.20. They are now being increased to $6.90.

Advertisement

Some call it childish. Others call it fun. The truth is, nobody is doing it this way.

Tesla updates Robotaxi app with several big changes, including wider service area

But today’s expansion of the Robotaxi service area in Austin is different. Tesla did not expand its shape to different neighborhoods or areas of the City of Austin. It did not expand it by broadening the rectangle that was initially available. Instead, it chose a different strategy, simply because it could:

Tesla could have done anything. It could have expanded in any direction, in any way, but it chose this simply because it has gotten Robotaxi to the point that it can broaden its service area in any direction. It chose this shape because it could.

Other companies might not have the same ability. Of course, many companies probably would not do this even if it could, simply because of the optics. Tesla doesn’t have those concerns; it has been open about its ability to be funny, and yes, immature, at times.

But in reality, it was a stark warning to competitors. “We can go anywhere in Austin, at any time, and we’re confident enough to make a joke about it.”

Tesla’s Robotaxi geofence in Austin grows, and its shape is hard to ignore

Advertisement

As Tesla is already aiming to expand to new states and high-population areas, and with applications filed in Arizona and California, Robotaxi will be in new regions in the coming weeks or months.

For now, it remains in Austin, and Tesla is sending a message to other companies that it is ready to go in any direction. The driverless Robotaxi fleet, bolstered by billions of miles of data, is ready to roam without anyone at the wheel.

Continue Reading

News

Tesla Robotaxi has already surpassed Waymo in this key metric

Tesla Robotaxi has already overtaken Waymo in Austin in one key metric, but there’s still more work to do.

Published

6 hours ago

on

July 14, 2025

By

Credit: @HanChulYong/X

Tesla Robotaxi has already surpassed Waymo in one extremely important key metric: size of service area.

Tesla just expanded its service area in Austin on Monday morning, pushing the boundaries of its Robotaxi fleet in an interesting fashion with new capabilities to the north. Yes, we know what it looks like:

Advertisement

The expansion doubled Tesla Robotaxi’s potential travel locations, which now include the University of Texas at Austin, a school with over 53,000 students.

The doubling of the service area by Tesla has already made its travel area larger than Waymo’s, which launched driverless rides in October 2024. It became available to the public in March 2025.

According to Grok, the AI agent on X, Tesla Robotaxi’s current service area spans 42 square miles, which is five square miles larger than Waymo’s service area of 37 square miles.

The service area is one of the most important metrics in determining how much progress a self-driving ride-hailing service is making. Safety is the priority of any company operating a ride-hailing network, especially ones that are making it a point to use autonomy to deploy it.

However, these companies are essentially racing for a larger piece of the city or cities they are in. Waymo has expanded to several different regions around the United States, including Arizona and Los Angeles.

Tesla is attempting to do the same in the coming months as it has already filed paperwork in both California and Arizona to deploy its Robotaxi fleet in states across the U.S.

As the platform continues to show more prowess and accuracy in its operation, Tesla will begin to expand to new areas, eventually aiming for a global rollout of its self-driving service.

Advertisement
Continue Reading

News

Tesla Megapacks arrive for massive battery replacing coal plant

Tesla Megapacks have started arriving on-site to the Stanwell Battery Project, just as Queensland prepares to wind down the Stanwell coal plant.

Published

7 hours ago

on

July 14, 2025

By

Tesla-megapack-pilot-project-willowbrook-mall
Credit: Tesla

The first of over 300 Tesla Megapacks have arrived to the site of a massive battery energy storage system (BESS) being built in Australia, dubbed the Stanwell Battery Project after a coal plant it’s set to replace.

In a press release last week, the Stanwell Battery Project announced that the first Tesla Megapack 2XL units had arrived to the site, which is located outside of Rockhampton in Queensland, Australia. The project will eventually feature 324 Megapack units, set to arrive in the coming months, in order to support the 300MW/1,200MWh battery project.

“The Stanwell Battery is part of the diversification of our portfolio, to include cleaner and more flexible energy solutions,” said Angie Zahra, Stanwell Central Generation General Manager. “It is just one part of the 800 MW of battery energy storage capacity we have in our pipeline.

“Capable of discharging 300 MW of energy for up to four hours (1,200 MWh), our mega battery will be one of the largest in Queensland.”

Credit: Stanwell

READ MORE ON TESLA MEGAPACKS: Tesla Lathrop Megafactory celebrates massive Megapack battery milestone

The state is working with government-owned company Yurika to facilitate construction, and the process is expected to create roughly 80 jobs. The project is expected to come fully online in May 2027, with initial commissioning of the Megapacks aiming for November 2025.

The Stanwell Battery is set to replace the nearby Stanwell coal generation plant, which the government is planning to wind down starting in 2026 as part of efforts to reach an 80 percent renewable energy generation ratio by 2035. Meanwhile, the government is also set to begin winding down the Tarong and Callide coal plants, while several other Megapack projects are being built or coming online. o ya

Tesla currently has two Megapack production facilities, located in Lathrop, California, in the U.S. and another that came online earlier this year in Shanghai, China. The Shanghai Megafactory shipped its first units to Australia in March, while both factories are expected to be capable of producing 10,000 Megapack units per year upon reaching volume production.

Advertisement

xAI receives more Tesla Megapacks for Colossus 2

Continue Reading

Trending