Keypoints:
- Tesla plans a $2.9 billion purchase of solar manufacturing equipment from Chinese suppliers.
- This supports Elon Musk’s goal to add 100 GW of U.S. solar capacity by 2028.
- The deal highlights U.S. reliance on Chinese manufacturing despite efforts to localize production.
- Chinese suppliers like Suzhou Maxwell Technologies are key candidates for the equipment.
Tesla plans to purchase $2.9 billion worth of equipment for making solar panels and cells from Chinese suppliers, including Suzhou Maxwell Technologies. This move supports CEO Elon Musk’s ambitious goal to add 100 gigawatts of solar capacity in the United States. Musk previously stated that solar power could fulfill all U.S. electricity needs, especially with the increasing demand from data centers. Job postings on Tesla’s website indicate a target to establish 100 GW of “solar manufacturing from raw materials on American soil before the end of 2028.”
Suzhou Maxwell Technologies, the world’s largest producer of screen-printing equipment for solar cells, is a leading candidate to supply machinery for this project. The company has reportedly sought export approval from China’s commerce ministry. Other potential suppliers include Shenzhen S.C New Energy Technology and Laplace Renewable Energy Technology. Sources familiar with the matter, who wished to remain anonymous, provided this information.
Some of the estimated 20 billion yuan ($2.9 billion) worth of equipment, including screen-printing production lines, will require export approval from Chinese regulators. It’s currently unclear how much equipment will need approval or how long the process will take. The Chinese companies have received instructions to deliver the equipment before this autumn, with some sources indicating it will be shipped to Texas. Musk intends to use this solar capacity primarily for Tesla’s operations, with some also powering SpaceX satellites.
This potential order highlights a challenge for the United States as it aims to reduce its dependence on China: rebuilding U.S. manufacturing still necessitates some trade with the world’s second-largest economy. Chinese media reported last month that Tesla visited several solar companies in China. Reuters is now reporting the specific companies in advanced talks, the estimated purchase size, delivery timeline, and regulatory requirements for the first time. Following the Reuters story, shares in Suzhou Maxwell, S.C New Energy, and Laplace Renewable all saw jumps of over 7%.
A major order from Tesla would significantly boost Chinese solar manufacturing equipment producers, who have faced slow demand due to a surplus in domestic production. The U.S. solar market, conversely, has strong protections from tariffs aimed at limiting imports of cheaper panels and cells from China and Southeast Asia. However, both the Biden and Trump administrations exempted solar manufacturing equipment from these tariffs. This decision allowed U.S. solar panel makers to acquire the necessary machinery to establish domestic factories, thereby fostering a U.S. solar supply chain.
Musk has criticized tariff barriers, arguing they make deploying solar in the U.S. “artificially high,” especially when the country faces a critical power shortage due to surging demand from AI data centers and manufacturing. His solar ambitions contrast sharply with former President Donald Trump’s energy policies, which prioritize fossil fuel production and have reduced federal subsidies for solar and wind projects.
Setting up 100 GW of solar manufacturing in just a couple of years is a colossal task, and Musk is known for making ambitious promises that often don’t materialize on schedule. As of 2024, the U.S. had 1,300 GW of electricity generating capacity, with only 10% (135 GW) from solar. Tesla has been working to source more components locally, but it remains dependent on 400 China-based suppliers to keep costs down, with 60 of them supplying Tesla globally, including its U.S. EV plants.
