The Tesla Megapack factory in Brookshire, Texas, has received official foreign-trade zone (FTZ) status. This designation allows the company to defer customs duties on imported components used in production for a period of 14 months.
Tesla submitted the application for Subzone 84AM on May 20. The facility, which began production of Megapack 3 units in August, has a planned annual capacity of 50 GWh.
Despite the FTZ status, Tesla must still pay tariffs under Section 301 on Chinese lithium iron phosphate (LFP) battery cells. These duties, which increased from 7.5% to 25% on January 1, 2026, remain applicable due to the privileged foreign status of the components.
The 14-month approval expires in late 2027. This timeline aligns with the expected start of LFP cell supplies from LG Energy Solution’s Michigan plant, part of a $4.3 billion contract for Megapack 3 production.
Tesla previously secured similar time-limited FTZ approvals for its facilities in Fremont, Livermore, and Lathrop, California. Other companies, including Qorvo and Rose Batteries, also received limited-basis approvals in 2026.
