Tesla is moving closer to opening its first lithium iron phosphate (LFP) battery factory in the United States.
The company recently posted a video on X of the factory, located in Sparks, Nevada. In the caption, Tesla said it is "nearing completion" of the facility, which Not a Tesla App reported will manufacture battery cells for Tesla energy projects such as Megapack and Powerwall.
Nearing completion of our first LFP cell manufacturing factory in North America pic.twitter.com/OLNRWajz4l
— Tesla (@Tesla) June 28, 2025
LFP batteries are growing in popularity, with manufacturing plants starting to pop up across the globe. Unlike other common batteries, LFPs don't use nickel or cobalt, which makes them lighter, less expensive, and less likely to catch fire. And because those metals don't need to be mined, producing LFP batteries is also a more eco-friendly process.
Previous incarnations of LFP batteries weren't powerful enough to replace other battery types, but recent improvements have made them viable alternatives.
Until now, Tesla has used Chinese suppliers for LFP battery cells. Plans for the Nevada factory were originally leaked in early 2024, and the company confirmed them during its first-quarter earnings call this year while also discussing the importance of energy storage to the company's future.
"The importance of this business … is pretty profound," Tesla CFO Vaibhav Taneja said during that call. "In order for grids to work properly with the demands from AI, you need some more stability."
Domestic production of LFP batteries has the potential to be a game-changer, not just for projects like Megapack and Powerwall, but also for electric vehicles.
If battery costs come down significantly, cars will also become more affordable, which could put more EVs on the road instead of polluting, gas-powered vehicles. That would be welcome news for Tesla, which has seen its sales numbers drop significantly this year.
The type of energy used to charge batteries can also have a huge impact on EV ownership costs. Using home-based solar energy, for example, is considerably cheaper than paying for energy from the grid or using public charging stations. To amplify those savings, EnergySage offers a free tool that enables consumers to compare quotes from local, verified solar panel installers while saving up to $10,000 on installation costs.
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