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Musk’s Terafab chip plant will run on gas, not Tesla solar

August 10, 2026 · Electrek · Score: 24

Elon Musk's SpaceX and Tesla are building Terafab, a $16.8 billion chip manufacturing plant in Grimes County, Texas, on the site of a former coal-fired power plant. Despite Tesla being a partner in the project, and despite Tesla making solar panels and batteries designed for exactly this kind of large power need, the plant will run on new natural gas power plants and large battery arrays. Tesla solar is not part of the power plan.

This fits a broader pattern. Musk's xAI has been running gas turbines at its Colossus data center near Memphis, some of them unpermitted, which is now the subject of a lawsuit over pollution near homes and schools. Musk also personally bought a gas turbine company, APR Energy, for about $1 billion in July, and SpaceX has committed more than $2.8 billion to gas turbines for its data centers. Terafab's gas plants continue that trend, even though Tesla and Sunrun recently launched a large solar-and-battery program aimed at data centers, and xAI itself has bought hundreds of millions of dollars in Tesla batteries in the past.

None of this changes anything about home energy programs or rebates. It's mainly a look at how one of the country's biggest new industrial power buildouts is choosing gas over solar, even when the cleaner option is made by companies its own owner controls.

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