Tesla in talks with Chinese firms to buy $2.9b worth of solar equipment

Tesla is looking to buy equipment worth $2.9 billion for manufacturing solar panels and cells from Chinese suppliers including Suzhou Maxwell Technologies, two people familiar with the matter said, as CEO Elon ‌Musk aims to add 100 gigawatts of solar capacity in the United States.

Musk said in January that solar power could meet all of the electricity needs of the ​United States - including the ever-increasing demand ⁠from a growing number of data centres. Job postings on the Tesla website said it aims to deploy 100 GW of “solar manufacturing ‌from raw materials on American soil before the end ‌of 2028”.

Suzhou Maxwell Technologies, the world’s biggest producer of screen-printing equipment used to make solar cells, is among the leading candidates to supply machinery for the project and has been seeking export approval from China’s commerce ministry, according to the two people and a third person. The sources declined to be named because the information is not public.

Other potential suppliers include Shenzhen S.C New Energy Technology ‌and Laplace Renewable Energy Technology , the first two people said.

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, ⁠according to the people. It wasn’t immediately clear how much of the equipment would require approval or how long it would take.

The Chinese companies were told to deliver the equipment before this autumn, the three people said, with two saying it would be shipped to Texas. Musk plans to build the solar capacity mainly for use by Tesla, although some will be used to power SpaceX satellites, the people said. The potential order highlights one issue for the United States as it looks to reduce its dependence on China - reviving US manufacturing still requires some degree of trade with the world’s second-largest economy. Chinese media reported last month that Tesla has visited several solar companies in China. The details of the companies in advanced talks, ​the estimated size of potential purchases, the delivery timeline, and regulatory requirements are reported here for the first time.

Shares in Suzhou Maxwell, SC New Energy and ‌Laplace Renewable jumped more than 7% after the Reuters story.

Tesla, China’s commerce ministry, Suzhou Maxwell, Shenzhen S.C New Energy and Laplace Renewable Energy did not respond to Reuters requests for comment. An order from Tesla would mark a big boost for Chinese producers of solar manufacturing equipment, which have struggled with weak demand because of a domestic production glut.

The US solar ⁠market, meanwhile, is heavily protected by tariffs aimed at curbing imports of cheaper panels and cells from China and Southeast Asia, where many Chinese producers operate subsidiaries.

However, solar manufacturing equipment was excluded from tariffs by the Biden administration in 2024 at the urging of U.S. solar panel makers who argued they had nowhere else to buy the machines needed to set up domestic factories. That exemption has been ​extended by the Trump ‌administration, and the United States has been pushing to create its own solar supply chain to reduce its dependence on Chinese companies.

Musk has criticised tariff barriers as making the ‌economics of deploying solar in the United States “artificially high”, when the country is facing a critical power shortage driven by a surge in demand from AI data centres and manufacturing. His solar ambitions cut a stark contrast with the energy policies of his former employer, President Donald Trump, who seeks to maximise U.S. fossil fuel production and has slashed federal subsidies for solar and wind projects, which he calls costly ‌and unreliable.

Musk briefly worked ‌for the Trump administration running the Department of Government Efficiency, which oversaw mass layoffs of federal workers ⁠to save money. US power consumption hit its second straight record high in 2025 and will rise further in 2026 and 2027, according to ‌the Energy Information Administration (EIA). Setting up 100 GW of solar manufacturing in a couple of years would be a staggering feat, and Musk is known for making big promises on ambitious timelines that often do not pan out.

Overall, the US had 1,300 GW of capacity to generate electricity as of 2024, according to ⁠a report published last year by the American Public Power Association. Out of that, only 10%, or 135 GW, was solar-powered.

Tesla has been on a push to source ​more components locally in different regions. However, it remains dependent on 400 China-based suppliers to keep its costs down. Sixty of them also supply Tesla globally, including for its US EV plants. Production preparations for Tesla’s Cybertruck and Semi models in the US encountered setbacks last year after component shipments from China were suspended, following ⁠a significant tariff hike on Chinese goods imposed by the Trump administration, Reuters previously reported.

Reuters