Tesla (TSLA.US) is set to construct its third Gigafactory near Houston.

According to a tax abatement agreement with Waller County, Tesla (TSLA.US) plans to build a new Gigafactory near Houston, Texas, as reported by Electrek. The company will take over a 1 million square foot building in the Empire West Industrial Park near Katy, Texas, which it had previously leased, to build a production line for its Megapack battery packs.

This week, Tesla's management said at a commissioners court meeting that the factory would be modeled after the one in Lathrop, California. The retrofit of the existing manufacturing facility includes boosting its power capacity and upgrading its heating and cooling equipment. Tesla will install manufacturing equipment, which is estimated to cost about $150 million.

The Katy, Texas, Megapack battery storage manufacturing plant will be Tesla's third such factory, following ones in California and a new one in Shanghai that has already gone into operation.

Notably, Tesla's stock price has been "falling like a rock" since the beginning of the year, down more than 30%, amid a slew of disappointing sales data in multiple regions, Elon Musk's foray into politics, and other factors that have hurt the company's brand image and caused investors to worry about the company.

Despite the controversy, Wall Street remains bullish on Tesla, with Morgan Stanley and Goldman releasing research reports saying that the company will benefit from the theme of physical artificial intelligence, and while it faces challenges in the short term, the increase in FSD revenue will improve its long-term profitability.

As of writing, Tesla's stock price fell 2.38% in pre-market trading to $272.45, with a 52-week price range of $138.80 to $488.54.