Tesla stock was rising in early trading Monday, as investors wonder what will give shares a jump start again. Elon Musk’s “Terafab” might be that catalyst.
Tesla stock was up 2.8% at $401.96, while the S&P 500 and Dow Jones Industrial Average were up 1.1% and 0.9%, respectively.
The move came after Musk tweeted over the weekend that Tesla’s “Terafab Project launches in 7 days.”
Musk and Tesla CFO Vaibhav Taneja discussed a Terafab—a large semiconductor manufacturing facility—during his company’s fourth-quarter earnings conference call in January.
Tesla plans to produce millions of AI-enabled cars and robots, which will require semiconductors—the supply of which could be constrained if not managed carefully.
“So I think in order to remove the constraint, the probable constraint in three or four years, we’re going to have to build a Tesla Terafab, a very big fab that includes logic, memory, and [semiconductor] packaging domestically,” said Musk. “If we don’t do the Tesla TeraFab, we’re going to be limited by supplier output of chips, and I think maybe memory’s an even bigger limiter than AI logic.”
Fabs aren’t cheap. Intel Corp is spending more than$20 billionon the initial phase of a new semiconductor fab in Ohio. Tesla plans to spend some $20 billion on new equipment this year. That doesn’t include the Terafab, however, according to Taneja.
Exactly what the Terafab Project will look like in its early stages is hard to say. Tesla didn’t immediately respond to a request for comment. It could be site selection or spending plans, with an initial timeline for breaking ground on a facility. It could outline partnerships with chip makers.
(Tesla partnered with Panasonic on its first battery-making factory.)
Whatever it is, investors are hoping for a stock bump. Coming into Monday trading, Tesla stock was down about 3% since the first missiles were fired in the U.S.-Israel war with Iran on Feb. 28, despite benchmark oil prices rising more than 40% in that time.
Higher oil prices mean higher gasoline prices, which could drive people to purchase EVs. Electric cars, however, are facing headwinds of their own. The $7,500 federal purchase tax credit expired at the end of September, causing U.S. EV sales to plunge 36% in the fourth quarter compared with the third quarter.
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