On January 31, Bloomberg reported that Tesla is expanding its battery factory in Sparks, Nevada, to introduce a lower-cost Lithium Iron Phosphate (LFP) battery supply chain to the United States.

According to the report, Tesla plans to purchase idle equipment from its Chinese battery supplier, Contemporary Amperex Technology Co. Limited (CATL), to produce batteries. The initial capacity of the factory is reported to be around 10 gigawatt-hours (GWh). Tesla, the Nevada Governor's Office of Economic Development, and CATL did not immediately respond to requests for comments from the media.

In 2024, Tesla's lowest-priced model, the compact electric sedan Model 3, lost eligibility for tax incentives under the "Inflation Reduction Act" due to the implementation of new regulations related to battery material procurement.