Tesla has filed an application with the state of Texas to build a solar cell factory with a total investment of $10.116 billion (approximately ¥1.6 trillion). The project, named “Project Crystal Sun,” would create roughly 9,700 jobs and rank among the largest U.S. manufacturing facilities in the company’s history.
According to the tax incentive application Tesla submitted to the Texas Comptroller of Public Accounts, the new factory is planned for an approximately 3,050-acre site near Richmond in Fort Bend County, outside Houston. Investment would be executed from 2026 through 2028, with approximately $1.5 billion (about ¥240 billion) allocated to real estate and approximately $8.6 billion (about ¥1.4 trillion) to equipment. Commercial production is expected to commence in Q1 2029.
The facility’s defining feature is its vertically integrated manufacturing model, spanning polysilicon production through solar cell and module assembly. The application describes equipment configurations covering the entire process—ingot and wafer manufacturing, coating, metallization, printing, cell testing, and module assembly—all completed within the United States. While most U.S. solar facilities merely assemble modules using imported cells, this represents an unusual undertaking to handle everything from raw materials to finished products at a single site.
According to estimates by Kroll, which conducted the economic impact analysis, the project would employ 9,712 full-time workers at full capacity, with an annual payroll of approximately $1.3 billion (about ¥210 billion). Over 38 years, it is projected to contribute approximately $107 billion (about ¥17.1 trillion) to the Texas economy and generate approximately $6.4 billion (about ¥1 trillion) in state and local tax revenue. The construction phase is expected to create an additional 1,147 temporary jobs.
The application is directly tied to CEO Elon Musk’s long-term goal of building 100 gigawatts of annual solar power capacity within the United States. At the Davos conference in January, Musk stated that Tesla and SpaceX each aim to achieve 100 gigawatts of U.S. solar manufacturing capacity, projecting it would take approximately three years to realize.
Musk’s stance on solar power has been consistent. In 2024, he remarked that “the sun is a giant free fusion reactor in the sky,” calling the construction of small fusion reactors on Earth “super silly.” He has also said of nuclear fission power that it is “a good thing, but it doesn’t hold a candle to that gigantic fusion reactor in the sky.”
Venture capitalist and “All-In” podcast co-host Chamath Palihapitiya responded to the news on X (formerly Twitter), posting “Tesla is going all-in on nuclear.” He added, “Actually, all-in on solar, but same thing. The sun is a fusion reactor, just far away.”
Realizing the plan will require collaboration with Chinese equipment manufacturers. Multiple media outlets have reported that Tesla is in discussions to procure approximately $2.9 billion (about ¥460 billion) worth of solar cell manufacturing equipment from Chinese companies including Suzhou Maxwell Technologies. Amid deepening U.S.-China tensions, reliance on Chinese-made equipment carries political risk, yet the reality is that Chinese companies hold overwhelming competitive strength in the solar cell manufacturing equipment sector.
The new factory is also positioned to integrate with the nearby Megapack large-scale energy storage system manufacturing facility under construction in Brookshire. The goal is to establish an integrated energy supply network within the United States combining solar generation with battery storage.
Tesla’s energy storage business is growing rapidly. Revenue reached $12.8 billion (about ¥2 trillion) in 2025, enabling the company to sell comprehensive energy systems combining solar panels, the Powerwall home battery, the Megapack utility-scale storage system, and power management software.
The solar business, however, has struggled for years. Tesla acquired SolarCity for $2.6 billion (about ¥410 billion) in 2016, but the Solar Roof product fell far short of Musk’s stated goal of 1,000 installations per week. Manufacturing partner Panasonic withdrew from the Buffalo factory in 2020, and by 2024 Tesla had stopped reporting solar deployment figures.
The turning point came in January, when Tesla unveiled new U.S.-assembled solar panels at the Buffalo factory. That facility’s initial production capacity is just over 300 megawatts annually—less than one-three-hundredth of Musk’s 100-gigawatt target. The Texas facility could become the cornerstone for closing this massive production capacity gap.
Texas is not yet confirmed as the final site, however. Tesla explicitly stated in its application that it is simultaneously evaluating candidate sites in multiple states. The company indicated that if the 10-year property tax abatement under JETI (Jobs, Energy, Technology, and Innovation Act)—a tax incentive program Texas introduced in 2024—is not approved, it would build the factory in another state.
The JETI program was established to attract large-scale investments in high-tech manufacturing and energy sectors to the state, and Tesla’s application represents the largest project under the program to date. Tesla shares rose 0.1% in premarket trading on the 13th. The stock closed down approximately 2% at $327.51 the previous day and is down roughly 27% year-to-date, making it the worst performer among the “Magnificent Seven.”
Expanding clean energy manufacturing capacity within the United States aligns with the supply chain reshoring trend that has continued since the Biden administration. Whether Tesla can secure Texas tax incentives—and how it navigates the project between reliance on Chinese equipment and U.S.-China tensions—will be key focal points going forward.
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