Why would Tesla want to build 100 GW of solar manufacturing capacity?

Sam Boughedda

Sat, February 14, 2026 at 6:30 PM GMT+9 1 min read

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Investing.com – Tesla’s plan to develop 100 gigawatts of solar manufacturing capacity reflects a long-term strategic view shaped by geopolitics, supply chain risks, and rising power needs from next-generation data centers, according to Morgan Stanley in a note this week.

“We believe TSLA’s decision to allocate capital to solar mfg is rooted in a strategic long-term outlook around evolving geopolitics and data center demand,” wrote analyst Andrew Percoco.

He told clients that deeper vertical integration could also strengthen the company’s energy business.

Morgan Stanley believes Tesla’s solar ambitions could add “$25–$50bn ($6–$14/shr) of equity value” to its Tesla Energy valuation, which the bank currently places at $140 billion.

Once scaled, Tesla Solar could generate “$25bn of revenue and $3–$4bn of additional EBIT,” the note added.

The 100 GW build-out would be costly, potentially requiring “$30–$70bn in capital investment,” and is not covered by Tesla’s capital expenditure guidance for 2026.

But Morgan Stanley argued the long-term benefits may justify the investment, especially given the strategic link to Tesla’s energy storage business.

Critically, Percoco said the bank believes “a significant portion of the 100 GW capacity will be used for data centers in space,” with a smaller share going to facilities on earth.

This aligns, the note said, with Elon Musk’s goal “to send a significant amount of solar-powered data centers into space,” avoiding energy bottlenecks that could hinder Tesla’s broader ambitions.

While the global solar market is currently in surplus, Morgan Stanley expects Tesla’s new capacity to be dedicated largely to these specialised applications, insulating it from traditional supply-demand dynamics.

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