The Tax-Free Savings Account was introduced in 2009 and remains a popular registered account in Canada. Any returns earned in the TFSA from qualified investments are tax-sheltered. Therefore, the account is ideal for buying and holding growth stocks that are positioned to deliver outsized gains.
The maximum cumulative TFSA contribution room has increased to $102,000 this year. Let’s explore how to build a $42,000 TFSA in 2025 that targets future industry leaders.
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TFSA stock #1
Valued at a market cap of $184 million, Electrovaya (TSX:ELVA) is a Canadian lithium-ion battery manufacturer specializing in heavy-duty and mission-critical applications, with a growing focus on robotics and high-voltage battery systems. The company is also advancing the development of solid-state battery technology.
Electrovaya reported impressive fiscal Q2 (ended in March) results with $15 million in revenue, an increase of 40% year over year. It reported a gross margin of 30% while operating income stood at $1.5 million. Management expects to surpass its $60 million revenue guidance for fiscal 2025, driven by strong order momentum, which exceeded $25 million in new contracts during the quarter.
Electrovaya is expanding lithium-ion cell manufacturing in Jamestown, New York, supported by a $51 million loan from the Export-Import Bank of the United States. Production is expected to begin by mid-2026, positioning Electrovaya as a leading North American manufacturer while minimizing its reliance on the Chinese supply chain.
Key growth drivers include expanding material handling vertical revenue, developing recurring revenue streams through energy service programs and software-enabled battery insights, and advancing solid-state battery technology with consistent progress in pouch cell cycling.
Electrovaya has secured orders from a second global construction original equipment manufacturer (OEM) through its partnership with Sumitomo for high-voltage battery systems, demonstrating growing market penetration in construction equipment applications.
Bay Street expects the TSX stock to increase adjusted earnings per share from $0.09 in 2024 to $0.84 in 2029. So, if ELVA stock is priced at 15 times forward earnings, it could almost triple in the next four years.
TFSA stock #2
Valued at a market cap of almost $800 million, Lithium Americas (TSX:LAC) is focused on developing, building, and operating lithium deposits and chemical processing facilities in the United States and Canada. Its flagship asset is the Thacker Pass project located in the McDermitt Caldera in Humboldt County, northern Nevada.
Lithium Americas reported progress on its flagship Thacker Pass lithium project during the first quarter, marking a pivotal moment for the North American lithium supply chain. The company achieved its first significant construction milestone in early May 2025 with the initial placement of permanent concrete in the processing plant area.
The project is now fully funded following a strategic $250 million investment from Orion Resource Partners in April 2025. Combined with General Motors’ $100 million partnership contribution, Lithium Americas has secured sufficient capital to complete Phase 1 construction, with production commencement targeted for late 2027.
Thacker Pass, located in Humboldt County, Nevada, hosts the world’s largest known measured lithium resource and reserve. The facility is designed to produce 40,000 tons of battery-grade lithium carbonate annually, positioning it as one of North America’s largest lithium operations.
With detailed engineering over 60% complete and structural steel fabrication beginning, the project represents a critical step toward domestic lithium supply independence.
While still pre-revenue in 2025, Lithium Americas is forecast to report sales of $130 million in 2027 and $272 million in 2028. Given consensus price targets, the TSX mining stock trades at an 86% discount to the consensus price target at present.
The Foolish takeaway
The two TSX stocks identified here offer significant upside potential to long-term shareholders. However, these companies need to successfully execute their plans and consistently beat broader market estimates to deliver game-changing returns over the next 10 years.
Canadian investors should identify other such stocks that are part of rapidly expanding addressable markets, which will result in portfolio diversification and lower overall risk.
