Tesla wins trade zone status for Texas Megapacks, but China tariffs stay

Tesla's Megapack factory in Brookshire, Texas has received foreign-trade zone status, but the approval does not exempt Chinese lithium iron phosphate cells from Section 301 tariffs, according to Electrek. The FTZ Board's decision runs for 14 months and applies to Subzone 84AM.

The factory, which began Megapack 3 production in August with a planned 50 GWh annual capacity, sought zone procedures for roughly 80 imported components. While duty rates on parts reach 6.5 percent and finished products range from duty-free to 3.4 percent, components subject to Sections 122, 232, or 301 must enter in privileged foreign status, locking in their original tariff treatment. Chinese cells still face the 25 percent tariff effective January 1, 2026, though payment is deferred until the finished Megapack leaves the zone.

The approval is authorized on a limited basis and expires around the end of 2027, roughly when LG Energy Solution is scheduled to begin supplying LFP cells from Michigan under a $4.3 billion contract. Tesla's CFO previously said tariff impacts on energy storage would be outsized due to Chinese cell sourcing, and the Nevada cell factory would cover only a fraction of capacity.

Source

Tesla wins trade zone status for Texas Megapacks, but China tariffs stay — Electrek