Tesla announces LFP battery factory nears completion

Tesla has announced that its LFP battery factory in Sparks, Nevada, is near completion. It is a milestone and a crucial step to localize the supply chain of this important component.

The EV maker also shared a video footage of the final phase, as workers and builders are giving the final touches to the site for the first production. All important machines and tools appear to be in place.

Lithium Iron Phosphate (LFP) batteries use lithium iron phosphate as the cathode material. These are known for their cost-effectiveness, safety, and durability compared to nickel-manganese-cobalt (NMC) or nickel-cobalt-aluminum (NCA).

However, these cells have lower energy density compared to their alternatives. Therefore, LFPs are highly considered for entry-level models, including the standard Model 3, Model Y, and energy products, including Megapack and Powerwall.

Tesla LFP battery Factory, Sparks, Nevada (Source – Tesla)

Tesla used to source LFP from Chinese companies, mainly from CATL. However, the new tax credit eligibility rules curbed non-US vehicle component imports, barring Tesla from taking such supplies. Meanwhile, it is still doing business with CATL and other providers for cars sold in China and other markets.

Early discussion on the Sparks plant surfaced in 2023-2024 with reports of Tesla purchasing battery production components from CATL. This agreement reportedly involved the entire equipment purchase with full control over the machinery and the facility, while reducing CATL’s participation in the project.

The factory is located in Sparks, Nevada, within or near Tesla’s Gigafactory, in the Tahoe Reno Industrial Center. Giga Nevada has been a center of Tesla’s manufacturing capability and employs tens of thousands of people across the state. One thing to know is that this factory already produces 4680 battery cells, electric motors, and powertrains with an annual 37GWh output.

On the other hand, the initial plan for the LFP factory is to produce batteries for Megapacks and 10 gigawatt-hours (GWh) annual output.