Investor Gary Black asserts that market participants are losing faith in Tesla Inc.'s ability to scale its unsupervised autonomous driving capabilities, citing a marked deceleration in deployment targets and strategic risks associated with its vision-only technology stack. The commentary, posted on X on August 11, 2026, highlights growing skepticism regarding the company's robotaxi ambitions as it faces increasing competition from Alphabet Inc.'s Waymo.

Black pointed to a series of downward revisions in Tesla's growth projections for its autonomous fleet. The company initially targeted serving half of the U.S. population by the end of 2025, but subsequently lowered its goal to doubling its fleet size every month following the first quarter. Most recently, AI Chief Ashok Elluswamy stated during the second-quarter earnings call that the current planned growth rate is +10% per week. Black interpreted this retreat from aggressive timelines as evidence that management may be concerned about safety limitations within the Full Self-Driving system.

The investor emphasized the reputational risk associated with rapid scaling, noting that even a single negative headline involving an FSD-related accident could cause significant damage. Consequently, he argued that the stock continues to underperform because investors doubt the technology can expand beyond its current roster of 90 to 100 unsupervised autonomous vehicles. This hesitation contrasts sharply with competitors who have achieved larger-scale operations without similar public delays.

Black compared Tesla's progress directly with Waymo, which operates 4,000 unsupervised autonomous vehicles without safety monitors and completes over 500,000 robotaxi rides per week. He suggested that Tesla's reluctance to scale faster indicates internal concerns that FSD may not be as safe as publicly portrayed. While acknowledging that Tesla continues to hire and build infrastructure under the assumption that it will solve edge cases and increase efficacy to 99.999%, Black warned that this approach carries inherent risks.

Strategic Risks of Vision-Only Approach

A central theme of Black's critique is Tesla's decision to pursue a vision-only route for economic reasons. He argued that this strategy forces the company to hope that competitors cannot develop safer self-driving technology by spending more on alternative sensor suites. Black advised against relying on management's assertions regarding proximity to solving unsupervised autonomy, stating that executives are "paid to be bullish." With three decades of experience in the industry, he emphasized that investors should not take managerial optimism at face value when assessing technological readiness.

Market sentiment reflected these concerns, with Tesla shares down 0.07% to $332.59 during overnight trading on Tuesday. Benzinga Edge Rankings indicated that Tesla scores poorly on Momentum and Value metrics, though it maintains satisfactory Growth and Quality scores. The shares also failed to show a favorable price trend across short, medium, and long-term horizons, underscoring the broader market caution surrounding the company's autonomous driving timeline.

Space Exploration Technologies Corp. (NASDAQ:SPCX) and Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk announced that construction will begin on the Terafab semiconductor manufacturing facility in Grimes County, Texas. Once completed, the facility will span 100 million square feet, making it the world's largest building by floor area—more than five times the size of the current record-holder, China's New Century Global Center. The plant is designed to produce more than 1 terawatt of AI compute hardware annually, consolidating logic, memory, packaging, and testing under one roof to mitigate supply chain risks for both companies.

Facility Scale and Design

The Terafab represents a significant expansion in physical infrastructure for Musk's ventures. According to data cited from World Atlas, the New Century Global Center in Chengdu, China, holds the existing record at 18.9 million square feet. The proposed Texas facility will dwarf this benchmark, covering 100 million square feet.

Musk aims to integrate the entire semiconductor production lifecycle within this single site. This vertical integration strategy is intended to address global supply chain constraints by housing logic, memory, packaging, and testing operations together.

Compute Allocation and Strategic Goals

The facility will primarily serve SpaceX and Tesla's artificial intelligence requirements. Musk confirmed via social media that the Terafab's output would be split approximately 75% for SpaceX and 25% for Tesla. The majority of the compute capacity will support SpaceX's AI spacecraft and space infrastructure, while the remainder will power Tesla's Optimus humanoid robots and its Cybercab fleet.

During SpaceX's first earnings call since going public, Musk stated that the company targets $1 trillion in revenue by 2030. He also emphasized the role of Starlink, asserting that the satellite internet service will be integrated into every car to provide super high bandwidth to billions of vehicles. The Terafab's custom chips are critical to enabling these high-bandwidth connectivity and autonomous driving capabilities.

Market Reaction

Following the announcement, Space Exploration Technologies Corp. shares traded lower in pre-market activity. SPCX was down 1.51% to $136.63 during pre-market trading on Tuesday. The market movement reflects investor digestion of the massive capital expenditure required for such a large-scale facility, despite the long-term strategic benefits of securing dedicated AI compute hardware.