Tesla ramps up clean energy efforts, plans to spend $2.9 billion on photovoltaic equipment procurement from China

Tesla is negotiating with several Chinese suppliers for a procurement of photovoltaic equipment worth about $2.9 billion (approximately 20 billion yuan) to support its ambitious plan to build 100 gigawatts of solar manufacturing capacity in the U.S.

According to Tesla’s official recruitment information and CEO Elon Musk’s statements at the Davos Forum in January, this goal is set for the end of 2028. The company plans to establish the relevant capacity in Texas, with electricity primarily for Tesla’s own use, and some will also power SpaceX’s satellites.

Upon the news breaking, A-share photovoltaic concept stocks surged. On March 20, the photovoltaic inverter index soared nearly 10%, with potential suppliers like Maiwei Co. and Jiejia Weichuang seeing their stock prices rise.

In response to market rumors, several manufacturers stated that they would adhere to publicly disclosed information. Notably, one photovoltaic company confirmed to the media that this matter is indeed happening and revealed that the contract scale is at the gigawatt level. Meanwhile, sources from other manufacturers indicated that the company has indeed received orders from North American clients but did not disclose specific names due to commercial confidentiality requirements.

Although the U.S. is striving to build a domestic photovoltaic supply chain to reduce dependence on China, the U.S. government has excluded solar manufacturing equipment from tariffs in 2024 because domestic manufacturers acknowledge that they have no other source for the critical machinery needed to build factories aside from China. This potential order highlights the real dilemmas the U.S. faces in trying to reduce reliance on China.

This potential large-scale procurement not only reflects the global competitiveness of Chinese photovoltaic equipment but also represents a key step for Tesla in advancing its clean energy vision. Musk has stated that solar energy is sufficient to meet all of America’s electricity needs, including the growing power demands of data centers. Building gigawatt-level manufacturing capacity in just a few years is an astonishing feat; Musk is known for setting ambitious timelines, but whether this can be successfully realized will still require time to test.

The procurement plan is still in the negotiation stage and involves regulatory approvals from both China and the U.S., so subsequent developments are worth close attention.