Tesla has confirmed that its first lithium iron phosphate (LFP) battery cell manufacturing facility in North America is nearing completion in Sparks, Nevada. The announcement, shared via the company’s official Twitter account on June 28, 2025, highlights a significant step toward domestic production of LFP cells, which Tesla currently imports from China for use in its Megapack energy storage systems.
Construction of the plant began quietly as part of the broader expansion of Gigafactory Nevada. Once operational, the facility will enable Tesla to produce U.S.-made LFP cells for both its energy storage products and potentially its electric vehicles. By localizing production, the company aims to reduce costs, decrease reliance on foreign suppliers and mitigate geopolitical supply chain risks.
In addition to supply chain benefits, domestic LFP production may help Tesla qualify for U.S. manufacturing incentives. Previously, the company paused sales of standard-range vehicles equipped with imported LFP batteries in the U.S. because they failed to meet federal EV tax credit requirements. With U.S.-made cells, Tesla could become eligible for the 45X manufacturing tax credit, which may allow the return of more affordable, credit-eligible models to the American market.
Patent filings indicate that Tesla’s in-house LFP cell designs could be more cost-effective than the imported versions it now relies upon. The move complements Tesla’s ongoing investment in domestic facilities; in 2024 alone, the company invested nearly $10 billion in U.S. infrastructure and manufacturing capacity.
The Sparks plant will mark Tesla’s first owned and operated LFP cell factory outside China. Its completion underscores the company’s strategy to fortify its supply chain, capitalize on domestic incentive programs and expand its manufacturing footprint in the United States.
Source: Tesla North
