Elon Musk is once again seeking to expand Tesla’s vertical integration in the energy sector, this time focusing squarely on solar power. Following discussions on X that highlighted the massive gap in solar deployments between the US and China, Elon is now discussing the need for a Tesla Solar Gigafactory in the United States.
This potential move is driven by a specific catalyst: the exponential growth of AI is creating an insatiable demand for electricity. For Tesla and xAI, two of Elon’s companies betting their future on AI, building the power generation required is a strategic necessity.
A new factory wouldn’t just be about making panels; it would be about manufacturing the final missing piece in Tesla’s vertically integrated energy ecosystem.
Maybe there should be a solar Gigafactory in America
The context for this renewed focus is pretty stark. In May, China reportedly added a staggering 93 gigawatts (GW) of solar power capacity. In contrast, the United States installed approximately 14 GW over the entire first quarter, roughly 20 times less than China.
The primary driver of this demand is the revolution in AI. Training ever-larger and smarter AI models involves operating vast data centers, which consume staggering amounts of power. Google, Amazon, and Microsoft have turned to small-scale nuclear reactors, with Microsoft petitioning to reopen the infamous Three Mile Island for its AI operations.
For Elon’s companies, whose future products like FSD, Optimus, and Grok are built on a foundation of real-world AI, securing a massive and sustainable energy supply isn’t a side quest. It is part of the main mission, especially in conjunction with grid-scale storage, such as Megapacks and Powerwalls. You can’t power a world of autonomous robots without a world of abundant, clean energy.
The Tesla Ecosystem
A US solar gigafactory would be the final, logical step in completing Tesla’s energy hardware ecosystem. While Tesla already manufactures some solar panels and the Tesla solar roof, the scale is too minuscule to matter.
By mass-producing its own panels, while also increasing Solar Roof production, Tesla would become a true one-stop shop for all things green energy. This would allow the company to supply its own large-scale projects, like the massive solar array for Project Oasis - the world’s largest Supercharger site.
It would also enable more complete residential packages, like the Giga-Small Haus concept home, combining Tesla-made panels and roofs with a Powerwall 3. This level of vertical integration would give Tesla complete control over the technology, cost, and supply of every major component in its energy ecosystem, from generation to storage to mobility.
Building a new Solar Gigafactory is about much more than just simply producing solar panels. It’s a requirement to power Tesla’s future products and make solar panels accessible to everyone.
Tesla has updated the Model 3 Long Range in China, giving the ever-popular sedan option a massive boost in performance and an increase in effective driving range. The Model Y Long Range also received a range increase.
While these changes are currently exclusive to the Asian-Pacific market and vehicles built at Giga Shanghai, they provide a preview of changes we expect to arrive in North American and European models in the future.
The New Specs
The updates, which are now appearing on Tesla’s configurator in China, are fairly substantial, particularly for the Model 3.
Model 3
The Model 3 Long Range’s 0-60 mph (0-100km/h) acceleration has been improved from 4.4 seconds down to 3.8 seconds. The CLTC-rated range has also increased from 713 km to 753 km. Those upgrades come with a modest price increase of 10,000 RMB (about $1,400 USD).
Overall, for the Model 3, that’s a 5.6% range increase. The current North American Model 3 Long Range AWD has an EPA-rated range of 342 miles (550 km). A similar 5.6% boost could push a future version to an estimated 361 miles (580 km) of EPA range.
Model Y
The Model Y Long Range, on the other hand, didn’t receive acceleration improvements. Instead, it received a CLTC range increase from 719km to 750km.
The Model Y's range saw a 4.3% increase. When the same percentage is applied to the North American Model Y Long Range's current EPA range of 327 miles (526 km), this could mean a future rating of around 341 miles (548 km).
Model 3 in Detail
The 0.6-second improvement in the Model 3’s acceleration is identical to the gains from Tesla’s existing Acceleration Boost, a software upgrade that improves performance and reduces the gap between the Performance and Long Range variants. In North America, Acceleration Boost costs $2,000 USD or $2,700 CAD.
The 10,000 RMB price increase in China (approximately $1,400 USD / $1,900 CAD) suggests Tesla is essentially bundling this performance unlock into the base price of the Long Range model, while also includes a notable range increase. While the new speed is a great perk for those wanting to go just a bit faster without splurging on a Performance variant, the more meaningful portion of the upgrade is the added range.
Coming to Other Regions?
The immediate question is whether this upgrade will come to North America and Europe for models built at Giga Texas, Fremont, and Giga Berlin. This seems fairly likely, as these off-cycle updates are most likely a result of optimizations to the vehicle, whether through battery, aerodynamic improvements, or something else.
However, if they are a result of optimizations at the battery manufacturing level, it’s possible that they may not reach all markets due to battery cell tariffs in North America and Europe, which prevent the import of batteries manufactured by Tesla’s partners, such as CATL.
What Next?
If these improvements can be implemented at all of Tesla’s factories, they likely will be in the coming months. We’ll have to watch closely to see whether Tesla adds this additional range, as well as the inclusion of Acceleration Boost, to other markets. The Chinese EV market is particularly competitive, and this has incentivized Tesla to include some additional features for free there to remain competitive. Our best guess would be that the range improvements will be seen in other markets if they’re not tied to battery changes; however, Acceleration Boost will remain as a paid upgrade.
Tesla appears to be preparing to expand its Robotaxi geofence in Austin, Texas, with numerous engineering vehicles taking to the road. One of the most interesting sights, between the short and tall LiDAR rigs, was a Cybertruck validation vehicle, which we don’t often see.
Tesla’s expansion is moving the Robotaxi Network into downtown Austin, a dense urban environment that is currently outside the geofence. It appears Tesla is content with the latest builds of Robotaxi FSD and is ready to take on urban traffic.
The inclusion of a Cybertruck in the validation fleet is noteworthy, as the rest of the vehicles are Model Ys. This suggests that Tesla may be addressing two challenges simultaneously: expanding its service area while also addressing the FSD gap between the Cybertruck and other HW4 Tesla vehicles.
Tesla Validating Downtown Austin before expanding the Robotaxi geo-fence area. pic.twitter.com/ylFATtjcDi
Recent sightings have shown a fleet of Tesla vehicles, equipped with rooftop validation sensor rigs, running routes throughout downtown Austin and across the South Congress Bridge. While these rigs include LiDAR, it’s not a sign that Tesla is abandoning its vision-only approach.
Instead, Tesla uses the high-fidelity data from the LiDAR as a ground truth measurement to validate and improve the performance of its cameras. In short, it essentially uses the LiDAR measurements as the actual distances and then compares the distances determined in vision-only to the LiDAR measurements. This allows Tesla to tweak and improve its vision system without needing LiDAR.
This data collection in a new, complex environment right outside the Robotaxi geofence is an indicator that plans to expand the geofence. Tesla has previously indicated that they intend to roll out more vehicles and expand the geofence slowly. Given that their operational envelope includes the entire Austin Metro Area, we can expect more locations to open up gradually.
Once they expand the operational radius to include downtown Austin, they will likely also have to considerably increase the number of Robotaxis active in the fleet at any given time. Early-access riders are already saying that the wait time for a Robotaxi is too long, with them sometimes having to wait 15 minutes to be picked up.
With a larger service area, we expect Tesla to also increase the number of vehicles and the number of invited riders to try out the service.
After all, Tesla’s goal is to expand the Robotaxi Network to multiple cities within the United States by the end of 2025. Tesla has already been running an employees-only program in California, and we’ve seen validation vehicles as far away as Boston and New Jersey, on the other side of the country.
Cyber FSD Lagging Behind
One of the most significant details from these recent sightings is the presence of a Cybertruck. Cybertruck’s FSD builds have famously lagged behind the builds available on the rest of Tesla’s HW4 fleet. Key features that were expected never fully materialized for the Cybertruck, and the list of missing features is quite extensive.
Start FSD from Park
Improved Controller
Reverse on FSD
Actually Smart Summon
It may not look like a lot, but if you drive a Cybertruck on FSD and then hop in any of the rest of Tesla’s HW4 vehicles, you’ll notice a distinct difference. This is especially evident on highways, where the Cybertruck tends to drift out of the lane, often crossing over the lane markings.
Tesla was testing parts of Downtown Austin, TX with this Cybertruck which had a massive roof rack, and sensors.
We previously released an exclusive mentioning that a well-positioned internal source confirmed with us that a new FSD build for the Cybertruck was upcoming, but we never ended up receiving that particular build, only a point release to V13.2.9. The AI team’s focus had clearly shifted to getting the latest Robotaxi builds running and validated, and while a flagship, the Cybertruck fleet was small and new, and really a secondary task.
The Cybertruck’s larger size, steer-by-wire, rear-wheel steering, and different camera placements likely present a bigger set of challenges for FSD. Deploying it now as a validation vehicle in a complex environment like downtown Austin suggests that Tesla is finally gathering the specific data needed to bring the Cybertruck’s capabilities up to par. This focused effort is likely the necessary step to refine FSD’s handling of the Cybertruck before they begin rolling out new public builds.
When?
Once Tesla’s validation is complete, we can probably expect the Robotaxi Network to expand its borders for the first time in the coming days or weeks. However, we’ll likely see more signs of the expansion, such as Robotaxi vehicles driving themselves around the area, before the expansion actually happens.
Hopefully, the Cybertruck will also learn from its older siblings and receive the rest of its much-needed FSD features, alongside an FSD update for the entire fleet.
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