Tesla Just Turned A US Factory Into Its Biggest China-Risk Hedge

Tesla, Inc. is transforming its U.S. factories into a hedge against risks associated with its reliance on China, particularly in the supply of batteries and AI chips. By producing LFP battery cells in Michigan and chips in Texas, Tesla aims to reduce exposure to tariffs and geopolitical disruptions, thereby stabilizing costs and enhancing the resilience of its supply chain. This strategy is particularly significant for Tesla's energy business, where the Megapack is becoming a high-margin segment powered by U.S.-based inputs, allowing for greater control and reduced dependency on overseas manufacturing.