Musk Unveils 'Terafab' Chip Moonshot in Austin

Elon Musk took the stage at a historic power plant in downtown Austin to announce "Terafab," a joint venture between Tesla, SpaceX, and xAI aimed at semiconductor independence Axios. The project’s goal is to produce one terawatt (1 trillion watts) of compute power per year, with much of that capacity destined for space-based data centers Axios. Musk stated the facility will integrate design, testing, and packaging under one roof to accelerate the development of chips for AI, humanoid robots, and solar-powered satellites Business Insider.

The facility, described as an "advanced technology fab," will be located near Tesla’s existing Gigafactory Texas headquarters Bloomberg. Musk argued that the move is a necessity because his existing supply chain provides "much less than we would like" Axios. While the plan envisions a future where anyone can fly to Saturn, analysts at Morgan Stanley noted the "herculean" nature of the task, given the specialized tools and massive capital required for semiconductor foundries Business Insider.

UBS Slashes Delivery Targets Amid EV Softness

UBS analyst Joseph Spak has significantly lowered his expectations for Tesla’s first-quarter 2026 performance, cutting delivery estimates to 345,000 vehicles The Street. This represents an 18% drop from the 421,000 units delivered in Q4 2025 and sits 7% below the consensus estimate of 371,000 TipRanks. The revision stems from slowing demand in the U.S., where domestic deliveries fell 6% year-over-year in early 2026 The Street.

The analyst noted that while Tesla’s stock price is increasingly driven by AI and Robotaxi narratives, the core auto business is what funds these capital-intensive bets, including a $20 billion capex budget for 2026 The Street. Tesla is currently winding down production of the higher-margin Model S and Model X, and has relied on zero-interest financing promotions to prop up retail deliveries in China The Street.

The FSD 'Vigilance Trap' and Safety Critiques

Raffi Krikorian, the former head of Uber’s self-driving division, published an essay detailing a crash in his Tesla Model X while using Full Self-Driving (FSD) with his children in the vehicle Boing Boing. Krikorian argues that the system creates a "trap" by working almost perfectly, which causes drivers to succumb to "vigilance decrement" and fail to reengage during the 5 to 8 seconds required for human intervention Boing Boing.

Legal pressure on Tesla’s automation continues to mount; a Florida case recently resulted in a $243 million verdict where plaintiffs had to hire a hacker to retrieve vehicle data Boing Boing. In contrast, competitor BYD has announced it will cover crash costs associated with its autonomous parking features Boing Boing. Meanwhile, D.C. transportation officials have been accused of stalling autonomous vehicle rollouts by failing to provide safety recommendations required by a 2020 law Washington Post.

Market Watch

TSLA closed Friday, March 20, 2026, at $367.96, ending the session with a 0.00% change. Markets are currently closed for the weekend. The stock remains down 17% year-to-date The Street. UBS maintains a "Sell" rating on the stock with a price target of $352, implying approximately 8% downside from Friday's close The Street. A jury recently found that Musk misled Twitter investors prior to his 2022 buyout, adding to the CEO's ongoing legal complexities Bloomberg.