Tesla turns to China in solar push
Tesla is reportedly seeking to purchase USD 2.9 billion of solar module and cell manufacturing equipment from Chinese suppliers to fuel its ultra-ambitious solar manufacturing expansion (Reuters).
Some context: Elon Musk revealed in January that Tesla and SpaceX were planning to build a whopping 100 GW of US-based solar manufacturing capacity by 2028.
- The modules would power the firms' ginormous expansion of data centers, both on Earth and in space.
More context: China is home to a range of cutting-edge solar manufacturing equipment makers.
- Without their products, Tesla would find it extremely difficult to build factories capable of manufacturing modules at the cost and scale required.
The interest is mutual: The dramatic slowdown in new Chinese solar CAPEX amid overcapacity has left equipment manufacturers starved for business and increasingly eyeing opportunities from overseas clients – and none are bigger than Tesla.
Get smart: Tesla succeeding in its solar self-sufficiency push could prove a nightmare for China's world-leading solar manufacturers – who would not only lose a major potential customer, but face the emergence of a new competitor at a time when they are already under massive financial pressure.
Get smarter: Beijing won’t sit idly by as its industrial champions inadvertently aid the industrial policy efforts of rivals actively working to reduce their dependence on Chinese solar supply chains. Don't be surprised if regulators slap new tech export restrictions on solar manufacturing equipment – as they’ve done with the battery industry.