Tesla (ticker symbol: TSLA) recently announced a major move in which the company is planning to expand its battery plant in Sparks, Nevada, to introduce a supply chain for cheap lithium iron phosphate batteries (LFP) to the U.S. market.。

Tesla will reportedly buy spare equipment from its Chinese supplier CATL for battery manufacturing, a decision that means the plant will have an initial capacity of about 10 gigawatt hours.。

Tesla, the Nevada Department of Economic Development and Ningde Times were not available for comment.。

It is reported that one of the reasons for the move is that the United States regulators on the company's dependence on countries such as China to source battery materials, such as nickel, cobalt and lithium restrictions.。This year, the Inflation Reduction Act took effect, making Tesla's cheapest model, the Model 3 compact sedan, ineligible for tax credits for the purchase of electric vehicles, which is related to the new battery material procurement regulatory policy.。

It is worth mentioning that China currently has the largest LFP battery manufacturers, including BYD and Ningde Times, which have been suppliers of Tesla batteries。Panasonic, on the other hand, partnered with Tesla to build a super factory in Nevada and invested in production equipment to supply Tesla with batteries.。