Tesla Model Y production will be expanding to a new Central US-based “Cybertruck” Gigafactory, according to a recent update from CEO Elon Musk. The plans for a second Model Y factory in the US bodes well for the electric carmaker, which is estimating an annual demand of up to 1 million units per year for the all-electric crossover.
The Tesla CEO initially stated that the yet-to-be-named Gigafactory would be allotted for the production of the Cybertruck next year. However, Musk clarified just moments later that the same production facility would also be utilized for building the Model Y for customers on the East Coast.
Currently, the Model Y is being built at Tesla’s main production facility in Fremont, California. The plans to produce the Model Y there were decided by the Tesla team as a whole. Initially, Musk stated he was skeptical if Fremont was the logical choice for production. “I was skeptical about whether this made sense at first, but my team convinced me the fastest way to get to volume production is to do the Y at Fremont,” he said on the Ride the Lightning podcast with Ryan McCaffrey.
Model Y production for east coast too
— Elon Musk (@elonmusk) March 11, 2020
The Model Y is already expected to be one of Tesla’s biggest sellers because of the growing crossover market, especially in the United States, where deliveries of the vehicle are expected to begin as soon as March 11.
Production is one of the company’s main focuses for 2020, and Tesla stated one of the most significant improvements it made during Q4 2019 was its ability to build cars efficiently.
The company utilized a vast amount of learnings it acquired from Model 3 production to create a more efficient building process for the Model Y. This breakthrough in production efficiency led to the announcement of the Model Y’s first deliveries being moved up to March 2020, instead of its planned initially initial deliveries being in the Summer.
Tesla plans to produce around 400,000 Model 3 and Model Y units a year, according to estimates found in the 2019 Q4 earnings report.
The ramping of Model Y production will be a gradual process. Tesla is looking to begin adding additional machinery to some of the production shops where the Model Y will be built. The presence of a more refined production process could eventually lead to an annual build volume of 500,000 Model 3 and Model Y units alone in production plants that already exist.
The addition of a new Central U.S. Gigafactory will lead to an even higher production volume for the company as a whole. With the Model Y expected to break Tesla into the widely popular crossover market, preparations for increased production are already underway with the planning of a new Central U.S. Gigafactory.
News
Tesla confirms that it finally solved its 4680 battery’s dry cathode process
The suggests the company has finally resolved one of the most challenging aspects of its next-generation battery cells.
Tesla has confirmed that it is now producing both the anode and cathode of its 4680 battery cells using a dry-electrode process, marking a key breakthrough in a technology the company has been working to industrialize for years.
The update, disclosed in Tesla’s Q4 and FY 2025 update letter, suggests the company has finally resolved one of the most challenging aspects of its next-generation battery cells.
Dry cathode 4680 cells
In its Q4 and FY 2025 update letter, Tesla stated that it is now producing 4680 cells whose anode and cathode were produced during the dry electrode process. The confirmation addresses long-standing questions around whether Tesla could bring its dry cathode process into sustained production.
The disclosure was highlighted on X by Bonne Eggleston, Tesla’s Vice President of 4680 batteries, who wrote that “both electrodes use our dry process.”
Tesla first introduced the dry-electrode concept during its Battery Day presentation in 2020, pitching it as a way to simplify production, reduce factory footprint, lower costs, and improve energy density. While Tesla has been producing 4680 cells for some time, the company had previously relied on more conventional approaches for parts of the process, leading to questions about whether a full dry-electrode process could even be achieved.
4680 packs for Model Y
Tesla also revealed in its Q4 and FY 2025 Update Letter that it has begun producing battery packs for certain Model Y vehicles using its in-house 4680 cells. As per Tesla:
“We have begun to produce battery packs for certain Model Ys with our 4680 cells, unlocking an additional vector of supply to help navigate increasingly complex supply chain challenges caused by trade barriers and tariff risks.”
The timing is notable. With Tesla preparing to wind down Model S and Model X production, the Model Y and Model 3 are expected to account for an even larger share of the company’s vehicle output. Ensuring that the Model Y can be equipped with domestically produced 4680 battery packs gives Tesla greater flexibility to maintain production volumes in the United States, even as global battery supply chains face increasing complexity.
Elon Musk
Tesla Giga Texas to feature massive Optimus V4 production line
This suggests that while the first Optimus line will be set up in the Fremont Factory, the real ramp of Optimus’ production will happen in Giga Texas.
Tesla will build Optimus 4 in Giga Texas, and its production line will be massive. This was, at least, as per recent comments by CEO Elon Musk on social media platform X.
Optimus 4 production
In response to a post on X which expressed surprise that Optimus will be produced in California, Musk stated that “Optimus 4 will be built in Texas at much higher volume.” This suggests that while the first Optimus line will be set up in the Fremont Factory, and while the line itself will be capable of producing 1 million humanoid robots per year, the real ramp of Optimus’ production will happen in Giga Texas.
This was not the first time that Elon Musk shared his plans for Optimus’ production at Gigafactory Texas. During the 2025 Annual Shareholder Meeting, he stated that Giga Texas’ Optimus line will produce 10 million units of the humanoid robot per year. He did not, however, state at the time that Giga Texas would produce Optimus V4.
“So we’re going to launch on the fastest production ramp of any product of any large complex manufactured product ever, starting with building a one-million-unit production line in Fremont. And that’s Line one. And then a ten million unit per year production line here,” Musk stated.
How big Optimus could become
During Tesla’s Q4 and FY 2025 earnings call, Musk offered additional context on the potential of Optimus. While he stated that the ramp of Optimus’ production will be deliberate at first, the humanoid robot itself will have the potential to change the world.
“Optimus really will be a general-purpose robot that can learn by observing human behavior. You can demonstrate a task or verbally describe a task or show it a task. Even show it a video, it will be able to do that task. It’s going to be a very capable robot. I think long-term Optimus will have a very significant impact on the US GDP.
“It will actually move the needle on US GDP significantly. In conclusion, there are still many who doubt our ambitions for creating amazing abundance. We are confident it can be done, and we are making the right moves technologically to ensure that it does. Tesla, Inc. has never been a company to shy away from solving the hardest problems,” Musk stated.
Elon Musk
Rumored SpaceX-xAI merger gets apparent confirmation from Elon Musk
The comment follows reports that the rocket maker is weighing a transaction that could further consolidate Musk’s space and AI ventures.
Elon Musk appeared to confirm reports that SpaceX is exploring a potential merger with artificial intelligence startup xAI by responding positively to a post about the reported transaction on X.
Musk’s comment follows reports that the rocket maker is weighing a transaction that could further consolidate his space and AI ventures.
SpaceX xAI merger
As per a recent Reuters report, SpaceX has held discussions about merging with xAI, with the proposed structure potentially involving an exchange of xAI shares for SpaceX stock. The value, structure, and timing of any deal have not been finalized, and no agreement has been signed.
Musk appeared to acknowledge the report in a brief reply on X, responding “Yeah” to a post that described SpaceX as a future “Dyson Swarm company.” The comment references a Dyson Swarm, a sci-fi megastructure concept that consists of a massive network of satellites or structures that orbit a celestial body to harness its energy.
Reuters noted that two entities were formed in Nevada on January 21 to facilitate a potential transaction for the possible SpaceX-xAI merger. The discussions remain ongoing, and a transaction is not yet guaranteed, however.
AI and space infrastructure
A potential merger with xAI would align with Musk’s stated strategy of integrating artificial intelligence development with space-based systems. Musk has previously said that space-based infrastructure could support large-scale computing by leveraging continuous solar energy, an approach he has framed as economically scalable over time.
xAI already has operational ties to Musk’s other companies. The startup develops Grok, a large language model that holds a U.S. Department of Defense contract valued at up to $200 million. AI also plays a central role in SpaceX’s Starlink and Starshield satellite programs, which rely on automation and machine learning for network management and national security applications.
Musk has previously consolidated his businesses through share-based transactions, including Tesla’s acquisition of SolarCity in 2016 and xAI’s acquisition of X last year. Bloomberg has also claimed that Musk is considering a merger between SpaceX and Tesla in the future.
Tesla confirms that it finally solved its 4680 battery’s dry cathode process
Tesla Giga Texas to feature massive Optimus V4 production line
