Tesla Inc is actively advancing plans to increase domestic solar cell production in the United States, marking a pivotal phase in Elon Musk's large-scale solar energy ambitions. The company is focused on establishing manufacturing facilities capable of producing solar cells at an unprecedented scale to meet the surging energy needs associated with artificial intelligence (AI) applications and autonomous vehicle technology.
Currently, Tesla is assessing various locations for expanding its solar manufacturing footprint, with a particular interest in enhancing capacity at its existing Buffalo, New York facility. Discussions indicate the possibility of enlarging this site to achieve an output capacity nearing 10 gigawatts annually. Beyond this, Tesla has contemplated the creation of a second solar cell production plant, potentially also based in New York, although this prospect is positioned as a longer-term objective.
The search for new manufacturing sites has extended beyond New York to other western states including Arizona and Idaho. Leadership on this initiative is under Vice President Bonne Eggleston, who is also spearheading recruitment efforts focused specifically on roles supporting the domestic solar manufacturing expansion.
Elon Musk disclosed last month that Tesla aims to ramp up solar cell production to an annual capacity of 100 gigawatts. The primary motivation behind this target is to supply the substantial electricity demands of AI data centers, both terrestrial and space-based. This plan would result in a solar cell output that considerably surpasses the current total U.S. production capacity.
Reflecting on the broader energy landscape, Musk previously forecasted solar power becoming the dominant global electricity source. This outlook aligns with concerns about rising electricity consumption within the technology sector, especially given the accelerating computational needs driven by AI advancements. Supporting this perspective, venture capitalist Chamath Palihapitiya has cautioned that the escalating strain of AI could potentially double electricity prices within five years.
Industry experts, including Wedbush analyst Daniel Ives, view Tesla's simultaneous developments in AI and autonomous vehicle technology as indicative of a critical growth phase for the company. Ives suggests that investors are increasingly concentrating on Tesla’s capacity to lead in the autonomous vehicle arena, moving beyond short-term market fluctuations and demand-related headwinds.
Specifically, Ives anticipates Tesla's robotaxi service coverage growing to encompass 30 to 35 cities within the U.S. over the coming year. The analyst further highlights Musk’s recent pay deal approval as a significant reinforcement of Tesla’s strategic stability. By securing Musk’s leadership through at least 2030, the arrangement is seen as a mechanism to preserve coherent execution of Tesla’s long-term business plans.
Ives describes the company's AI and autonomous driving initiatives as transformative elements that could add as much as $1 trillion in value over time. Moreover, he envisages Tesla’s market capitalization potentially approaching $2 trillion by mid-2026, contingent on the broader adoption of Full Self-Driving technology and the acceleration of the Cybercab robotaxi rollout.
Market response to these developments has been positive, with Tesla’s stock price rising by 2.97% to $409.02 at the time of reporting. This price movement reflects growing investor enthusiasm aligned with Tesla’s expanding operational and technological scope.
Overall, Tesla’s push into large-scale solar manufacturing is a critical component of its strategy to address the significant power requirements of emerging AI-driven technologies and autonomous transportation solutions. The company’s deliberate site selections and leadership involvement underscore its commitment to domestically scaling solar cell production and integrating renewable energy solutions with next-generation technologies.