Tesla Negotiating $2.9B Deal with Chinese Companies for Solar Equipment

Tesla is in discussions to purchase nearly $3 billion worth of solar manufacturing equipment from Chinese suppliers as part of Elon Musk's ambitious plan to build 100 gigawatts of solar capacity in the United States by 2028. The equipment would be delivered to Texas before autumn and highlights America's continued reliance on Chinese technology even as the country tries to reduce dependence on China.

Electric vehicle giant Tesla is negotiating to purchase nearly $3 billion in solar manufacturing equipment from Chinese companies as part of CEO Elon Musk’s ambitious plan to establish massive solar production capacity in America, according to sources familiar with the discussions.

The deal involves purchasing equipment valued at approximately $2.9 billion from several Chinese suppliers, with Suzhou Maxwell Technologies – the global leader in screen-printing equipment for solar cell production – emerging as a primary candidate to provide machinery for the project. Sources say the company is currently seeking export clearance from China’s commerce ministry.

Additional potential suppliers in the negotiations include Shenzhen S.C New Energy Technology and Laplace Renewable Energy Technology, according to people close to the matter who requested anonymity since the discussions are confidential.

Musk announced earlier this year his goal to establish 100 gigawatts of solar manufacturing capacity using American raw materials by the end of 2028. In January, he stated that solar energy has the potential to satisfy all electricity requirements across the United States, including the growing power demands from expanding data center operations.

The Chinese manufacturers have been instructed to deliver the equipment, including screen-printing production lines, before this fall, with sources indicating the machinery will be shipped to Texas. Some of the equipment worth an estimated 20 billion yuan requires export authorization from Chinese authorities, though the timeline for approval remains unclear.

Musk intends to use the solar capacity primarily for Tesla operations, though some will also power SpaceX satellite systems, according to the sources.

This potential purchase underscores a key challenge facing the United States as it attempts to decrease reliance on China – rebuilding domestic manufacturing capabilities still requires some level of trade with the world’s second-largest economy.

The order would provide significant relief to Chinese solar equipment manufacturers who have faced declining demand due to domestic overproduction. Meanwhile, the U.S. solar industry operates under heavy tariff protection designed to limit imports of lower-cost panels and cells from China and Southeast Asia.

Solar manufacturing equipment was exempted from tariffs by the Biden administration in 2024 following requests from American solar panel manufacturers who argued they had no alternative sources for necessary factory machinery. The Trump administration has maintained this exemption as the U.S. works to develop its own solar supply chain.

Musk has previously criticized tariff policies, arguing they make solar deployment in America “artificially high” in cost at a time when the nation faces critical power shortages driven by artificial intelligence data centers and manufacturing growth.

His solar initiatives present a sharp contrast to the energy agenda of President Trump, who advocates for maximizing fossil fuel production and has reduced federal support for solar and wind projects, which he characterizes as expensive and unreliable.

According to the Energy Information Administration, U.S. electricity consumption reached its second consecutive record high in 2025 and is projected to continue rising through 2027.

Establishing 100 gigawatts of solar manufacturing within a few years would represent an extraordinary accomplishment, though Musk has a history of announcing ambitious goals with aggressive timelines that sometimes face delays.

Current U.S. electricity generation capacity totaled 1,300 gigawatts as of 2024, with solar power accounting for only 135 gigawatts or 10% of the total, according to the American Public Power Association.

While Tesla has been working to increase local sourcing in various regions, the company still relies on approximately 400 China-based suppliers to maintain competitive costs. Sixty of these suppliers serve Tesla’s global operations, including U.S. electric vehicle facilities.

Tesla’s Cybertruck and Semi production preparations in the United States experienced delays last year when component shipments from China were halted following substantial tariff increases on Chinese goods implemented by the Trump administration.

Tesla, China’s commerce ministry, and the Chinese companies mentioned did not respond to requests for comment.