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The Model Y and Gigafactory 3 heralds a faster, more profitable Tesla
Tesla’s second-quarter report and its succeeding earnings call provided updates on what could very well be two of the electric car maker’s most pertinent projects to date: the Model Y ramp and Gigafactory 3 in Shanghai, China. Based on Tesla’s recent reports, it appears that both initiatives are moving along at an impressive pace, perhaps even faster than initially expected.
Model Y
When Elon Musk unveiled the Model Y last March, he provided a rough timeline for the upcoming vehicle. During his presentation, Musk mentioned that the all-electric midsize SUV would start deliveries starting Fall 2020 for the Long Range, Dual Motor AWD, and Performance versions, and Spring 2021 for the Standard variant. This was quite conservative, considering that Musk has a reputation for setting extremely aggressive targets for the production of the company’s vehicles.
Since then, several reports have emerged which hinted at Model Y production being far less volatile and challenging than the Model 3’s manufacturing ramp, a task so difficult that Elon Musk candidly called the period as “production hell.” In the Q2 Update Letter, Tesla confirmed that preparations for Model Y production have begun in the Fremont factory. The company also mentioned that due to the overlap in the components of the Model Y and the Model 3, the company was able to “leverage existing manufacturing designs in the development of the Model Y production facilities.” This bodes well for the midsize SUV, considering that Tesla had rolled out several improvements to Model 3 production process over the years.
Several other hints have also emerged suggesting that Tesla will be ramping the Model Y with its best technologies available. Recent patent applications, for example, have revealed that Tesla is working on a new wiring architecture that will reduce the wires used in the Model Y to just 100 m per vehicle, a significant reduction from the 1.5 km currently being used for the Model 3. Another patent has also emerged showing the design for a mammoth casting machine, which was hinted at by Elon Musk during an appearance at the Ride the Lightning podcast last month. “When we get the big casting machine, it’ll go from 70 parts to 1 with a significant reduction in capital expenditure on all the robots to put those parts together,” Musk said.
Considering all the innovation that is being implemented for the Model Y, it appears that Tesla is doing all it can to ensure that the vehicle does not encounter delays with its rollout. In fact, with Fremont already being prepared for the Model Y, and with giant casting machines being designed specifically for the vehicle, it almost seems like Tesla is trying to start the manufacturing of the SUV earlier than expected. There’s a long time between today and Fall 2020, and that seems to be more than enough to work out the manufacturing of a vehicle that is, in essence, a taller, more spacious Model 3.
Gigafactory 3
Over in China, another understated Tesla project is taking shape. When Elon Musk attended Gigafactory 3’s groundbreaking ceremony back in January, he stated that initial production of the Model 3 in the facility would begin by the end of the year. This target timeframe was met with disdain and skepticism from critics, many of whom have noted that no car factory has ever been built in the speed that Musk wanted. Six months later, Gigafactory 3’s general assembly building is practically complete, and its interior is already being tooled. Footage from drone flyovers showed the rise of the factory, and images from Tesla’s Q2 Update Letter showed that some sections of the facility already have robots installed in them.
Quite interestingly, it is not Elon Musk that is providing ambitious timeframes for Gigafactory 3 anymore. Instead, it is Chinese government officials. Local reports, for example, have suggested that China is looking to start initial Model 3 production as early as September, with the facility ramping to an output of 150,000 vehicles per year early next year. Compared to Wall Street’s estimates, which currently suggest that Gigafactory 3 will produce around 35,000 to 40,000 vehicles in 2020, China’s goals for the facility are far more optimistic.
Gigafactory 3 has pretty much exceeded expectations since work in the facility entered overdrive. Just like the Model Y ramp, the key to Gigafactory 3 lies in the company’s innovations with Model 3 production. Tesla mentioned this in its Q2 Update Letter. “Gigafactory Shanghai continues to take shape, and in Q2 we started to move machinery into the facility for the first phase of production there. This will be a simplified, more cost-effective version of our Model 3 line with capacity of 150,000 units per year – the second generation of the Model 3 production process,” Tesla wrote.
There is no doubt that 2019 is turning out to be an incredibly challenging year for Tesla. Following the first quarter, which saw lower-than-expected vehicle deliveries, Tesla set new delivery records in the second quarter, only to end once more at a loss. Yet, together with this, the company also ended the quarter in more stable footing, as shown by its $5 billion in cash, the largest in its history. This was recently addressed by Baird analyst Ben Kallo, who noted that “back to the cash flow they generated during the quarter, there’s a couple of hundred million dollars, so this idea that they don’t make money is completely wrong, and the headline needs to change. There’s $5 billion in the balance sheet. They’re not going out of business.” Ultimately, the Model Y and Gigafactory 3 seem to be two projects that are heralding a new era for Tesla: one that is more mature, precise, and poised to disrupt at a scale that’s never seen before.
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Cybertruck
Tesla Cybertruck production snaps back after ugly supplier fight
Cybertrucks are piling up again at Giga Texas after Tesla’s court win against a parts supplier.
Cybertruck production at Giga Texas is showing its first visible recovery since Tesla sued a supplier last month over withheld manufacturing tooling.
Aerial observer Joe Tegtmeyer flew over the Austin factory Wednesday morning and counted roughly 100 or more Cybertrucks filling the outbound lot, a sharp jump from the thin numbers seen in recent weeks. The flyover came a day after a judge granted Tesla a temporary restraining order against Angstrom Automotive Group, the parts supplier at the center of the dispute.
Tesla filed an emergency lawsuit in late July after Angstrom told the automaker it planned to close the Troy, Texas facility where Tesla’s die-cast tools, trim dies and other Cybertruck stamping equipment were housed. According to Tesla’s complaint, a shipment of 700 finished parts never left the building, and when Tesla sent representatives to retrieve its equipment, accompanied by law enforcement, they were turned away. Angstrom allegedly then asked for an extra $250,000 a week to keep operating, which Tesla’s filing described as holding its own property for ransom.
TESLA: U.S. District Judge Christopher R. Wolfe of the U.S. District Court for the Western District of Texas, Waco Division granted Tesla a Temporary Restraining Order and Writ of Replevin in its dispute with Angstrom Automotive (Case No. 6:26-cv-00477).
The order authorizes… https://t.co/E1DKcQSxMn pic.twitter.com/LR8aAiV2Og
— S.E. Robinson, Jr. (@SERobinsonJr) August 5, 2026
The restraining order gives Tesla immediate right of entry to Angstrom’s facility to recover the tooling. It is temporary, with a fuller hearing still to come, but the speed of Wednesday’s rebound suggests the Angstrom shortage was indeed the main bottleneck limiting Cybertruck output. Outbound lot counts are an imperfect measure of actual production, since finished trucks can sit for days before shipping, but a lot that full after a lean stretch is a meaningful signal.
Cybertruck output at Giga Texas has fluctuated all year as Tesla worked through supply issues and introduced new trims, including a cheaper Dual Motor AWD version that drew strong early demand.
Elon Musk
Space finally faced the people living next to its next Terafab mega-project
SpaceX confirmed Terafab’s Grimes County site is locked in, with construction starting within months.
SpaceX and Terafab representatives sat across from Grimes County residents for the first time on Wednesday, telling a packed Commissioners Court room that the $55 billion chip manufacturing project is now a done deal at the Gibbons Creek Reservoir site.
The meeting followed a $10 million check SpaceX sent the county earlier this week, satisfying a payment deadline built into the tax abatement agreement both sides signed in June. Elon Musk shared a post on X confirming the payment, and County Judge Joe Fauth told the San Antonio Express-News his office deposited the check after it beat its deadline.
Wednesday’s session, first reported by KBTX, moved the project from paperwork to construction. Terafab representative Riley Trennell told residents the JETI tax break agreements with Iola ISD and Anderson-Shiro CISD are signed and active, and that civil work and foundation prep are starting almost immediately. Renderings of the facility could be released within days, he said, with construction beginning within months.
The foundations for an exciting future are being built in Texas. Next up: Terafab → https://t.co/jGg52Zhn5I pic.twitter.com/SNfSXNr2tb
— SpaceX (@SpaceX) August 6, 2026
Elon Musk launches TERAFAB: The $25B Tesla-SpaceXAI chip factory that will rewire the AI industry
Musk first announced Terafab in March as a joint venture between Tesla, SpaceX and xAI aimed at producing over a terawatt of AI compute annually, an amount that dwarfs the roughly 20 gigawatts the entire global chip industry produces today. Intel joined as a manufacturing partner in April. Musk has said the project needed its own day in the spotlight rather than being squeezed into an earnings call, and for months the Grimes County site remained unconfirmed even as reporting pointed there.
SpaceX attorney Buck Brannon used Wednesday’s meeting to note that the company’s abatement is roughly 78 percent, not the 100 percent some earlier reports suggested. In exchange, SpaceX will pay Grimes County a fixed $20 million a year for 35 years, a total of $710 million, which Brannon said exceeds the $14 million Tesla paid Travis County in 2025.
SpaceX also addressed environmental concerns that have followed the project since Musk’s Terafab partnership with Intel was announced. Representatives said Terafab will not raise electric bills for other ratepayers, will not deplete local water supplies and will not draw down the Navasota River. SpaceX confirmed it owns the Navasota River pumping station, which it plans to use to divert stormwater into the Gibbons Creek Reservoir, and said it will build its own natural gas plants to power the facility rather than pulling from the ERCOT grid.
Grimes County commissioners also approved an addendum letting county employees use ten approved AI chatbots for work, including Grok.
Elon Musk has declared that SpaceX has effectively solved one of Starship’s most persistent engineering challenges: the reliability of its heat shield tiles.
During the company’s first-ever Earnings Call, the SpaceX CEO stated:
“I don’t want to jinx it or anything, but I think I would call the heat shield problem solved at this point. All indications from data and visual inspection is we have solved it. That doesn’t mean we won’t make improvements, but we do not see any technical obstacles to achieving rapid reusability at this point.”
Starship’s heat shield consists of roughly 18,000 hexagonal ceramic tiles covering the windward side of the upper stage. These tiles form the thermal protection system that shields the vehicle’s stainless-steel structure from the extreme heat of atmospheric reentry.
Elon says he believes the heat shield problem with Starship is currently solved.
He called it “arguably the single biggest problem” pic.twitter.com/eEE9vM5zlz
— TESLARATI (@Teslarati) August 4, 2026
During descent, atmospheric friction generates temperatures exceeding several thousand degrees Celsius and creates plasma flows capable of melting unprotected metal. The tiles absorb, radiate, and insulate against this energy, allowing the vehicle to survive and potentially fly again. Without a durable heat shield, full and rapid reusability, the cornerstone of Starship’s design for frequent launches, satellite deployments, and deep-space missions, would remain impossible.
The tiles have long been a source of difficulty. On earlier test flights, a significant number of tiles detached during ascent due to vibration, aerodynamic loads, and imperfect attachment methods using pins and adhesives. Gaps between tiles allowed hot plasma to infiltrate, causing secondary damage and hot spots on the underlying structure.
These issues echoed challenges faced by NASA’s Space Shuttle, whose ceramic tiles required extensive, labor-intensive inspections and replacements between missions, preventing rapid turnaround. SpaceX has iteratively improved materials, standardized tile shapes, refined attachment techniques, added secondary ablative layers, and tested sealing methods such as “crunch wrap” felt to close gaps.
Progress was visible across Flights 10–12, with steadily better tile retention, yet questions remained about whether the system could support the minimal-refurbishment goal of rapid reuse.
Flight 13 on July 24 provided the decisive evidence. Ship 40 flew a deliberately more demanding profile with higher dynamic pressure to stress the heat shield beyond typical operational loads. It successfully deployed 20 operational Starlink V3 satellites, the first such payload on a Starship mission, performed an in-space Raptor engine relight, and executed a controlled reentry.
Elon Musk sheds two new bits of detail on Starship after 13th test launch
Cameras on six of the satellites and onboard sensors captured extensive imagery and data of the shield throughout the flight. The ship then achieved its softest splashdown to date in the Indian Ocean, remaining intact and floating rather than breaking apart or exploding as on prior missions. This allowed drone inspections and continuous telemetry of the heat shield in near-real time.
Post-flight analysis showed the majority of tiles remaining attached with only minor damage and limited plasma streaking at seams. Musk noted that the mission delivered “all the heat shield data we needed and then some.” Combined with visual inspections, these results underpinned his subsequent assessment that the core technical barriers to rapid reusability have been cleared. While refinements will continue, Flight 13 marked a pivotal step toward Starship’s operational future.
Tesla Cybertruck production snaps back after ugly supplier fight
Space finally faced the people living next to its next Terafab mega-project
