Tesla has begun volume production of its Semi electric truck and joined chipmaker Nvidia in a combined $2.8 billion investment to expand advanced chip substrate capacity. Together, the moves support the company's push into commercial transport, autonomous driving, and humanoid robots. The progress failed to lift the share price, however: Tesla, Inc. (TSLA) slipped 0.63% to $372.22, shedding $2.36, after morning selling erased early gains.

Semi Moves Beyond Pilot Production

Tesla has moved the Semi beyond pilot production and into commercial-scale manufacturing of its electric truck, a shift that extends the company's reach into freight transportation and large commercial fleets. Higher output could help the company compete more effectively in the electric trucking market, where established heavy-truck manufacturers are also developing battery-electric models for fleet buyers.

The Semi, first unveiled in 2017, had until now been produced only in pilot volumes, and it adds heavy trucks to a lineup that already spans passenger vehicles, battery systems, and a charging network. Fleet operators need reliable vehicles, charging facilities, and service support for daily operations, so the program's expansion depends on manufacturing capacity, delivery schedules, and infrastructure for business customers.

Tesla sells vehicles and energy products across the United States, China, and other regions. The new Semi output adds another production line to its existing manufacturing operations, and expanding truck deliveries may create additional demand for commercial charging and energy services.

Tesla and Nvidia Fund $2.8 Billion Chip Supply Expansion

Tesla and Nvidia announced a combined $2.8 billion investment in Samsung Electro-Mechanics to expand production of chip substrates — the components that connect processors to the electronics supporting advanced computing systems. The investment targets hardware for autonomous driving technology and Tesla's Optimus humanoid robot.

Substrates have become a critical link in the semiconductor chain as demand for AI computing hardware has surged industry-wide, and multiyear supply commitments of kind are a common way for large chip buyers to lock in constrained capacity. The agreement reportedly includes five years of priority supply access for advanced substrates. That arrangement supports production planning for Tesla's custom chips and related hardware, and greater supply capacity could help ease shortages as computing demand increases.

Tesla uses specialized processors in its vehicles and hardware projects, creating sustained demand for advanced components. Nvidia's involvement extends the project beyond Tesla's automotive business and into wider computing supply chains. Together, the two firms aim to secure manufacturing capacity for systems that require specialized electronics.

Falling Quarterly Profit Puts Expansion Costs in Focus

Tesla reported third-quarter 2026 net income of $787 million, down from $1.37 billion a year earlier. The decline reflects ongoing profitability challenges amid spending on vehicles, chips, and production capacity. New factories and equipment can raise costs before output generates substantial revenue, and those expenses will test Tesla's ability to convert its larger manufacturing footprint into stronger earnings.

Semi output must continue to grow while the chip investments support products that have yet to reach commercial markets. Meanwhile, the company continues to fund its existing vehicle, battery, and energy operations. Upcoming quarterly reports will show whether Semi deliveries scale as planned and how quickly the substrate spending flows through to costs — two variables that will shape the payoff timeline for both projects.

One valuation model cited in the analysis estimates Tesla's fair value at $408 per share. The estimate remains separate from the stock's current trading price and depends on future performance. Ultimately, revenue growth and operating costs will determine the financial impact of these projects.

Source: Blockonomi