Tesla’s Gigafactory Texas, seen here in April.
Jay Janner /Austin American-Statesman
Tesla Inc. CEO Elon Musk is taking a spend-money-to-make money-attitude as he pushes the Austin company toward new pursuits — and away from being just an automaker.
Some of those pursuits will have direct impacts in Austin.
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Here’s a look at how Central Texas — and the state — are likely to be impacted.
Terafab’s Austin site
Construction is seen north of the Tesla Giga Texas factory in Austin on Wednesday, March 25, 2026. CEO Elon Musk said Tesla and SpaceX are planning the world’s largest chip manufacturing plant, called Terafab, but said this site would be used for a smaller facility focused on chip design.
Jay Janner/Austin American-Statesman
Tesla said in its earnings report Wednesday that it is making progress on construction and equipment procurement for its semiconductor development plant in Austin, which is tied to SpaceX’s larger Terafab project that appears to be headed for a site near College Station.
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“That development fab, I think, is pretty cool,” Musk said, adding the plant at Gigafactory Texas will include space for everything from mass producing semiconductor chips to testing and packaging.
“So you can have a very fast iterative cycle and try out new chip designs very quickly and see if they work,” he said. “I don’t think such a building exists anywhere on Earth.”
Regarding the main Terafab plant, Musk said Tesla would officially announce a location soon. All signs are pointing to Grimes County, where county and school district officials have already given at least preliminary approval to tax breaks for the plant, which is expected to employ 3,000 people.
“I think this is a very big announcement and it deserves to have its own sort of day in the spotlight and not be sort of squeezed into an earnings call,” Musk said. “But I do think Terafab is going to be an amazing initiative and a necessary one, and one without which we will be constrained in our ability to scale.”
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Cybercab slowdown
A Tesla Cybercab drives in downtown Austin, Tuesday, May 19, 2026.
Jay Janner/Austin American-Statesman
Musk also disclosed that Cybercab, the purpose-built robotaxi being produced at Gigafactory Texas, isn’t quite ready to join the company’s robotaxi fleet. Tesla is still conducting chassis testing and needs to accumulate more driving data before the two-seaters are road ready.
“We actually have to accumulate miles with Cybercabs that are retrofitted with steering wheels and brakes, acceleration, braking that kind of thing, to calibrate to the Cybercab chassis,” Musk said. “So you’ll see as we are confident about that, the number of Cybercabs in cities will increase dramatically.”
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Cybercabs have become a fairly common sight around Austin, where they’re being tested on city streets and used by employees at Gigafactory Texas.
Robotaxi rollout
Tesla has less than 50 of its Robotaxi-branded Model Ys operating in Austin, a fleet total that’s widely overshadowed by industry leader Waymo’s 300 cars providing rides in the city. Would-be riders say they haven’t been able to book a trip in a Tesla robotaxi because none are available.
Statewide, Tesla has 175 cars registered compared to Waymo’s fleet of 677.
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Despite being so far behind in its home city and state, the company has been touting expansion of its service to other major metros, this week adding Tampa and Orlando, Fla., and making preparations to launch in Las Vegas.
Those facts led a Wells Fargo analyst to question Tesla’s robotaxi strategy during its investor call after earnings were released Wednesday, asking why the company doesn’t scale up in Austin or another city with existing services before growing to new markets.
Tesla leaders said they want to prove their service works across several different cities and argued that growth has been “exponential” when considering miles driven.
The company dug into that point after the call, posting on social media that it has had no notable incidents across 380,000 miles traveled by its fleet. Even by mileage, though, Waymo is far ahead. The company has rolled up 15.8 million rider-only miles in Austin alone through March.
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Pivot to AI, robots and more
A Tesla Optimus robot is on display at a pop-up event at Fareground Austin in downtown Austin during the South by Southwest Conference and Festivals on Friday, March 13, 2026. The free event allows the public to get an up-close look at Tesla’s Cybercab and Optimus robot and continues through 10 p.m. Saturday, March 14.
Jay Janner/Austin American-Statesman
Robotics is a key part of Tesla’s shift away from consumer vehicles. It said Wednesday its plant to build the Optimus humanoid robot at Gigafactory Texas is moving forward, with “building construction now in full swing.” It also noted it has doubled its computing power in Texas to support development of vehicle and humanoid robot autonomy software.
Musk said the plant will someday produce 10 million Optimus humanoid robots a year and that Tesla expects to begin Optimus production by the end of the year at a retooled EV plant in California, with Austin to follow.
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But it could be a long road before Tesla is producing 10 million robots a year. Musk pointed out that there’s practically no supply chain for Optimus components and Tesla has had to produce much of them in-house.
Tesla-SpaceX merger
He also turned attention to the ways xAI and SpaceX seep into Tesla’s work, noting the availability of xAI’s Grok chatbot in Tesla vehicles and Starlink wireless internet services being integrated into Cybercab. Such activity has spurred chatter that a Tesla and SpaceX merger is inevitable.
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“Well, I mean, as you can tell from the many collaborations on so many fronts with SpaceX, and there’s a lot there’s more and more overlap, especially with Terafab. That’s really going to be a gigantic project,” Musk said. “But obviously you know we can’t talk about combining companies and that kind of thing. It’s got to be done with the appropriate process.”