SpaceX Terafab to Run on Gas, Not Tesla Solar
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- SpaceX confirmed Terafab will run on newly built natural gas power plants and "very large battery arrays," with no Tesla solar in the plan, even though Tesla co-owns the project and sells solar panels, Powerwalls, and grid-scale batteries built for this kind of load.
- Terafab, a $16.8 billion chip megafactory in Grimes County, Texas — down from the $25 billion floated in March — sits on a former coal-fired power plant site and is meant to produce over a terawatt of compute per year for SpaceX and xAI data centers, plus future Optimus and Cybercab chips.
- The gas-first pattern traces to xAI's Colossus data center near Memphis, which has run on gas turbines since 2024, including 27 unpermitted turbines in Southaven, Mississippi that the NAACP, Southern Environmental Law Center, and Earthjustice are suing over for emitting more than 1,700 tons of nitrogen oxides and 19 tons of formaldehyde a year next to homes and schools.
- Musk personally bought gas turbine company APR Energy for roughly $1 billion in July, acquiring more than a gigawatt of turbine capacity, while SpaceX has separately committed more than $2.8 billion to gas turbines to power its data centers.
- Tesla itself markets solar-plus-storage as the data-center answer — xAI bought $269 million of Tesla Megapacks earlier this year and Tesla and Sunrun launched a 16 GW virtual power plant pitched at data centers in June — but Musk owns roughly 20% of Tesla versus 100% of APR Energy, reshaping the incentive calculus.
- Trump's DOJ intervened on national-security grounds to keep the unpermitted Mississippi turbines running after regulators moved in, per the source.
Why it matters: The choice isn't physics — gigawatt-scale solar-plus-storage is hard but feasible — it's speed, cost, and ownership. Musk owns 100% of APR Energy versus roughly 20% of Tesla, so the gas buildout funnels value to a wholly-owned asset while Tesla, the company that markets solar-plus-storage as the data-center answer, is left out of its own partner's power plan.
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