June 29, 2025 | Sparks, Nevada — Tesla is preparing to commission its first North American lithium iron phosphate (LFP) battery plant at its Gigafactory campus in Sparks, Nevada. The factory, dedicated exclusively to producing LFP battery cells, marks a strategic shift in Tesla’s energy storage supply chain and localization efforts.
According to Tesla’s official announcement on X (formerly Twitter), the facility is set to begin initial operations in the coming weeks. With a starting annual capacity of approximately 10 GWh, the plant will primarily supply LFP cells for Tesla’s energy storage products—such as Megapack and Powerwall—rather than for vehicles. Industry sources confirm that equipment for the new production lines was sourced from CATL, Tesla’s longtime partner and the global leader in LFP technology.
LFP batteries are known for their superior thermal stability, longer cycle life, and lower cost compared to nickel-based chemistries. These advantages have made them increasingly popular in both stationary storage and entry-level electric vehicles. Tesla currently uses LFP cells in its standard range Model 3 and Model Y units produced in China, but until now has relied on imports for North American demand.
With U.S.-China trade tensions and the push for domestic energy security intensifying, Tesla’s Nevada LFP plant is seen as a pivotal move to reduce dependence on foreign battery imports. It also aligns with U.S. Inflation Reduction Act (IRA) incentives, which favor domestically produced battery components.
Analysts expect the plant’s capacity to eventually scale beyond 20 GWh annually, supporting not only Tesla’s energy division but also future vehicle applications. “This move allows Tesla to take greater control of its battery cost structure while securing a more resilient supply chain for its rapidly expanding energy business,” commented a BloombergNEF analyst.
While Tesla has not disclosed an exact commissioning date, the company confirmed that the factory is in the final stages of readiness. Once operational, the plant will significantly boost Tesla’s vertical integration in North America and potentially reshape the domestic LFP battery landscape.
This development positions Tesla at the forefront of the LFP transition in the U.S., as automakers and utilities alike increasingly shift toward safer, more cost-effective energy storage solutions.