Terafab reversal to build and run it alone, record California Powerwall virtual power plant…
Three developments. (1) On 7 Oct Musk himself overturned the 6 Oct line that TSMC was joining Terafab. He made clear that Tesla and SpaceX will build and run it themselves, that TSMC can only be a tenant, and that the process bet rests solely on Intel's 14A.
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(2) At the California demand peak on 6 Oct, 85,774 Powerwall homes sent back 601 MW, and the whole fleet peaked at 634 MW, roughly the size of a large utility-scale power plant. (3) A Cybercab in Philadelphia was in a low-speed collision, and the whole left-side door panel came off, exposing the internal structure.
Key evidence
- Musk on X, 7 Oct, in his own words: 'We will build and run the fab. Let there be ZERO doubt about that.' TSMC may rent a part of Terafab, but that is all.
- Intel CEO Lip-Bu Tan confirmed in Tokyo the same day that Intel remains the only foundry partner, supplying the 14A process (High-NA EUV).
- After the news, Intel rose about 2% pre-market and TSMC's US-listed shares fell about 1.3%.
- Terafab investment starts at $16.8 billion and underpins the compute base across four lines: FSD, Robotaxi, Optimus and xAI.
- The earlier line on compute allocation, about 25% to Tesla Optimus and 75% to SpaceX, is unchanged.
- At the California demand peak on 6 Oct, 85,774 Powerwall homes fed back 601 MW, and the whole Powerwall fleet peaked at 634 MW.
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- Energy storage had a gross margin of 20.4% in Q2 against 16.3% for automotive, the highest of any business in the company.
- The virtual power plant extends the one-off sale of Powerwall hardware into long-term grid services and recurring peak-shaving revenue.
- @TeslaZoa posted on X on 7 Oct: a Philadelphia Cybercab was in a low-speed collision, and the whole left-side door panel fell off, exposing the internal structure.
- This adds to earlier ride-experience problems, such as the 17 Sep case in Austin in which a 10-minute ride took 70 minutes, and butterfly doors and a trunk that would not close properly.
Catalysts to watch
- Yield and progress checks on Intel's 14A (High-NA EUV)
- A formal agreement and timetable for Terafab
- The revenue-sharing model and expansion of the California virtual power plant
- Growth in Powerwall and Powershare installations driving service-based storage revenue
- Accumulating samples and quality data from Cybercab's training deployment in Philadelphia
Risks
- Building and running it alone means Tesla and SpaceX carry the advanced-process production risk by themselves, and Intel's 14A is itself unproven
- So far there is only a single reply from Musk on X, with no formal agreement or change to the timetable
- Four lines compete for the same compute base, and the allocation line is unchanged
- The 634 MW is an instantaneous peak on a single day, not sustained capacity, and VPP revenue-sharing is still small change against total revenue
- The virtual power plant depends on California's electricity pricing mechanism and compensation incentives, so it relies heavily on the regulatory regime
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- The door panel coming off in a low-speed collision is a single case, but combined with the problems in the ride experience it points to manufacturing consistency and crash tolerance of the steering-wheel-free dedicated vehicle that are yet to be proven
- A door panel that comes off easily may also be a modular design that makes replacement easy, and more samples are needed
Sources 9
- Musk on X, 7 Oct
- TeslaNorth
- Pomegra
- Reuters
- Tesla official X, 6 Oct
- DriveTesla
- 24-7WallSt
- @TeslaZoa on X, 7 Oct
- NotaTeslaApp
A brief is a lead for our research, not a verified conclusion or advice.