Tesla’s In-House Battery Plant Could Give Cybercab a Major Edge

Coming into Thursday trading, Tesla stock was down 15% this year. (Andrey Rudakov/Bloomberg)

Key Points

• Tesla has launched its battery cathode plant in Texas, producing its first Cybercab using in-house cathode material.
• CEO Elon Musk said Tesla built the cathode refinery to secure its supply chain and ensure the company will prosper.
• Tesla stock was down 15% this year heading into Thursday trading as investors wait for the company’s robo-taxi service to scale up.

Tesla’s battery cathode plant in Texas is up and running. It’s another example of vertical integration at the electric-vehicle maker—and of disruption.

Wednesday, Tesla’s robo-taxi account on X tweeted out a picture of the first Cybercab made “using our in-house cathode material—from the first cathode plant in America.”

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Cathodes are one side of a battery that facilitates the flow of electric current. It accounts for 35% to 40% of the total battery cost. Battery makers, including Tesla, assemble completed batteries, but they often source cathode material from suppliers in China, Korea, Japan, and elsewhere.

Umicore , BASF , Sumitomo Metal Mining, and LG Chem are four cathode material suppliers.

Tesla built the plant to improve efficiency, localize supply of key components, and secure its supply chain. “Can someone else build these things? It is very hard to build these things,” said CEO Elon Musk on Tesla’s fourth-quarter 2025 earnings conference call. “We build them out of desperation, because nobody else is building lithium refineries and cathode refineries…we’re making moves to make sure that no matter what happens, Tesla will prosper.”

Lower costs help any business. Tesla stock might not react much to the news. Investors aren’t as focused on EVs or EV battery technology these days. They are focused on Cybercab, Tesla’s purpose-built self-driving taxi that doesn’t have a steering wheel or pedals. Tesla launched a robo-taxis service in Austin, Texas, in June 2025, and investors are waiting for it to scale up and contribute meaningfully to Tesla’s bottom line.

Robo-taxis are an example of Tesla’s pivot from a car maker into a provider of physical AI applications. (AI teaches the cars to drive.)

Tesla stock was down 0.9% in premarket trading at $376.80 Thursday, while S&P 500 and Dow Jones Industrial Average futures were down 0.6% and 0.3%, respectively.

Tesla stock has been stuck, while investors wait for more robo-taxis. Coming into Thursday trading, Tesla stock was down 15% this year and down 14% over the past 12 months.

Write to Al Root at allen.root@barrons.com.

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