Musk's $1 Trillion Terafab Anchors Him in Texas, Says Dan Ives

A chip fab that Musk himself prices at $1 trillion cannot change its address. That single fact, according to Wedbush analyst Dan Ives, is why Elon Musk cannot simply relocate from Texas to Florida after a hostile political turn in Austin.

Ives, one of Wall Street's best-known Tesla (NASDAQ:TSLA) bulls, summed up Musk's post-midterm position in one line on The Pomp Podcast: "He can't just pick up and go to Florida."

His reasoning centers on SpaceX (NASDAQ:SPCX). "SpaceX needs to build themselves into a hyperscaler and Texas is a key part of it," Ives said, adding that Musk "is going to have to, I think definitely olive branch a bit" with the state's incoming leadership.

What is the $1 trillion Texas problem?

The core asset is Terafab, a Texas chip plant that Tesla and SpaceX are building together. It targets 1 million wafers a month, and Musk estimates it could cost $1 trillion to build. Neither figure is confirmed; both rest on Musk's own projections.

SpaceX also wants a gas-fired power plant and a supercomputer at Starbase, with a first phase estimated at $24 billion. That project still awaits a tax decision from Starbase's city commission. The fab, the power plant and the compute capacity all have to be built by somebody, and a wave of suppliers stands to benefit.

Investors have already marked down the risk. SpaceX shares fell 12% over the past month to about $143. SpaceX board member Donald Harrison resigned one day after the elections. Tesla slipped less than 1% over the same month, though it is down 16% this year.

On Nov. 7, Musk posted on X that "SpaceX and Tesla have prospered in Texas, because we were not constantly operating under an oppressive and extractive state government." The complaint followed the midterm results. The rhetoric suggests friction. The assets say otherwise.

Why does the tax math side with Ives?

Texas voters approved Proposition 4 in 2019 with 77% support. Any future state income tax now needs a two-thirds majority in the legislature. Florida levies no personal income tax either. Both rates are zero, so the savings from a move are zero.

That applies to Musk's pay, including the stock compensation linked to Tesla's 2025 CEO Performance Award, which Tesla recently valued at a $158 billion price tag for last year's pay. Moving from Austin to Miami would not lower the state income tax on any of it.

What a move cannot do is take the assets with it. Texas taxes business property in the local taxing unit where it has "taxable situs" — where it physically sits. A fab and a power plant sit in Texas no matter where their owner lives. Leaving would cost Musk political goodwill and save him nothing.

Does the same logic apply to ordinary movers?

The source walks through the general arithmetic. Savings equal the rate gap between two states, applied only to income that actually moves with the relocating person. A state can still tax a nonresident on income derived from sources within that state. California, for example, taxes residents on all income but nonresidents only on California-source income.

The illustrative numbers make the point. Consider a remote worker earning $150,000 who leaves a state with a 5% flat income tax for one with no income tax:

• Annual savings: $7,500
• Home sale fees on a $400,000 house: about 6%, or $24,000
• Moving costs: $10,000
• Break-even: roughly 4.5 years; after a decade she is $41,000 ahead

The Texas-to-Florida version collapses. The rate gap is 0%, so annual savings are $0. The mover never breaks even, and the full $34,000 in moving costs becomes a loss. The result is identical if income stays linked to the old state — an on-site job, or equity awards that vest and are sourced there.

What should anyone check before moving for taxes?

The source offers a four-step checklist:

1. Find the real rate gap. Use both states' current brackets from their revenue departments. If both rates are zero, there is no income tax savings to capture.
2. Separate portable income from fixed income. Remote salary moves. On-site work, a local business, rental property and unvested stock earned in the old state may still be taxed there.
3. Ask payroll how equity will be allocated. Stock vesting after a move is often split between states by days worked in each. Get the split in writing before setting a moving date.
4. Count every switching cost — home sale fees, moving expenses, higher insurance and property taxes — and divide by annual savings to get break-even years.

For Musk, the caveats are obvious. The $1 trillion Terafab cost and the 1-million-wafer target are his own estimates, not validated plans. The $24 billion Starbase figure is a first-phase estimate pending a municipal tax ruling. But the direction is clear: the assets are fixed, the tax savings are zero, and the political repair work falls on him.

The next signal is how Starbase's city commission rules on the power plant tax decision under Texas's incoming leadership.