Terafab is going to be expensive. Asked by Deutsche Bank on Tesla's Q3 2026 earnings call on Wednesday, Oct. 21, 2026 how much capital the chip fab needs, Elon Musk said it is "not going to be less than tens of billions in capital equipment up through early 2028" and "will probably be north of $100 billion long term," according to the call transcript.
Who pays is still open
Terafab is a joint Tesla and SpaceX project. Musk said the companies still have "to figure out like what the sort of relative split is between SpaceX and Tesla in terms of who pays for what." MarketWatch noted that Intel and a few others also have roles in the project.
Orders are already placed
CFO Vaibhav Taneja said Tesla, which is building the first, research fab in Austin, has "already placed most of the orders" for its equipment. Musk said commissioning of that machinery starts in the first half of 2027, with a first test chip hoped for around May or June 2027 and "some kind of useful chip at volume around Q3 of 2028." Taneja added that "real production would be late '28."
Why investors care
The figure lands a day after Tesla cut its 2026 capex guidance to about $20 billion, and as Tesla and SpaceX study a possible merger. Investing.com highlighted Musk's warning of steep capital needs for the chip venture alongside his comments tempering Optimus expectations. Musk repeated on the call that he expects Terafab to be "the most valuable building in the world." For the earlier timeline, see our Terafab test-chip story and the Terafab tracker.