Tesla (TSLA) reportedly in talks to buy $2.9B in Chinese solar equipment for 100 GW US push

Image: Tesla

Elon Musk’s plan to build 100 GW of solar manufacturing capacity in the United States just got its first major price tag: $2.9 billion in equipment from Chinese suppliers, according to a Reuters exclusive.

If the deal closes, it marks the biggest concrete investment yet in Musk’s solar ambitions, and a stunning reversal for a company that effectively abandoned its solar business just two years ago.

The deal

Reuters reports that the equipment is valued at roughly 20 billion yuan ($2.9 billion) and that Tesla is in discussions with multiple Chinese suppliers. The frontrunner is Suzhou Maxwell Technologies, a Shenzhen-listed company that dominates the global market for solar cell screen-printing production lines.

Other potential suppliers include Shenzhen S.C New Energy Technology and Laplace Renewable Energy Technology.

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The Chinese companies have been told to deliver the equipment before this autumn, with at least two sources indicating it would be shipped to Texas. That aligns with Tesla’s expanding Texas manufacturing footprint, which already includes its Austin Gigafactory and a new Houston Megafactory under construction for Megapack production.

One significant hurdle remains: Suzhou Maxwell needs export approval from China’s commerce ministry, and it’s unclear how quickly that clearance will come. Beijing has been tightening its grip on solar technology exports over the past two years, and China’s commerce ministry recently made export controls a top priority for 2026.

On the US side, the equipment faces a more favorable regulatory path. Solar manufacturing equipment was excluded from Section 301 tariffs in 2024 at the urging of American solar panel makers, and that exemption has been extended by the Trump administration through November 2026.

The 100 GW ambition

The $2.9 billion equipment purchase is tied directly to a goal Musk laid out at the World Economic Forum in Davos in January 2026. There, he announced that both Tesla and SpaceX are independently working to build 100 GW per year of solar manufacturing capacity in the US — covering the entire supply chain from raw materials to finished panels.

The company’s own job listings reinforce the scale of the ambition, explicitly referencing a target of 100 GW of “solar manufacturing from raw materials on American soil before the end of 2028.”

For context, total US solar installations in 2023 reached about 32 GW. Tesla wants to manufacture more than three times that, every single year, on its own.

The driving force behind the urgency isn’t climate policy, it’s AI. Data center construction and the broader electrification of transportation pushed US power consumption to a second consecutive record in 2025, and the projections keep rising. Musk has argued that no other energy source can scale fast enough or cheaply enough to meet those demands.

Tesla’s troubled solar history

The irony is thick. Tesla acquired SolarCity for $2.6 billion in 2016 and promised to revolutionize the residential solar market with its Solar Roof tiles. Musk set a target of 1,000 new solar roofs per week by the end of 2019. Tesla never came close. By Q2 2022, the company was deploying approximately 23 roofs per week — roughly 2% of the target.

Today, Tesla never talks about its solar roof; it’s essentially a dead product.

Tesla’s solar deployment declined steadily after the SolarCity acquisition. Panasonic, which had partnered with Tesla at the Buffalo Gigafactory to manufacture solar cells, exited the facility in 2020. By late 2024, Tesla stopped reporting solar deployment altogether, and the word “solar” didn’t appear once during the company’s Q3 2024 earnings call.

There were signs of a revival in early 2026 when Tesla launched a new US-made solar panel (the TSP-420) assembled at the Buffalo factory, featuring a proprietary 18-zone power optimization system. But the scale was modest — initial capacity at the Buffalo facility was just over 300 MW per year, a rounding error compared to the 100 GW target.

Energy storage is a different story

While Tesla’s solar business withered, its energy storage division exploded. Tesla deployed a record 46.7 GWh of energy storage in 2025, a 48% increase year-over-year, generating $12.8 billion in revenue with a 29.8% gross margin — nearly double what Tesla earns selling cars.

Energy storage now accounts for 13% of Tesla’s total revenue and 23% of its gross profit. The Lathrop Megafactory in California produces Megapacks at its full planned capacity of 40 GWh per year, and the new Houston facility targets 50 GWh of annual output by end of 2026.

The solar manufacturing push would complement this storage infrastructure — Tesla could theoretically pair its own solar panels with Megapacks and Powerwalls for integrated energy solutions, and potentially use the output to power its own operations and even SpaceX satellites.

Electrek’s Take

We’ve been tracking Tesla’s solar journey since the SolarCity acquisition, and the trajectory has been one of consistent underdelivery. The Solar Roof never materialized at scale. Solar deployments cratered. The entire solar business segment became an afterthought as energy storage consumed all of Tesla’s energy division attention.

So when Musk announced a 100 GW solar manufacturing target at Davos, our first instinct was skepticism — and it still is. Going from roughly 300 MW of annual solar panel capacity at the Buffalo factory to 100 GW is a staggering 300x increase, on a timeline of less than three years.

That said, the $2.9 billion equipment purchase suggests this isn’t just talk. That’s real capital being deployed (or at least negotiated), and the autumn delivery deadline for equipment in Texas suggests Tesla intends to move fast. The company also has genuine tailwinds: the tariff exemption on solar manufacturing equipment, surging electricity demand from AI data centers, and a proven energy division that can integrate solar with its storage products.

The biggest risks are execution, Tesla’s solar track record is dismal, and the Chinese export approval, which Beijing could use as leverage in the ongoing trade tensions. We’ll believe the 100 GW target when we see equipment on the ground and production lines running.

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Tesla launches US-made solar panel, a rare sign of life for its solar business

Tesla has updated its online configurator with a new solar panel heavily emphasizing its US manufacturing at Gigafactory New York. It’s a surprising new product launch for a business that Tesla has seemingly been dismantling for the last two years.

For years now, we have been reporting on the slow decline of Tesla’s solar business.

After acquiring SolarCity in 2016, Tesla’s solar deployment has never reached the highs of its predecessor. The situation became dire over the last few years as Tesla stopped scheduling projects in many markets and eventually stopped reporting its solar deployment numbers entirely in 2024.

Instead, the company shifted its strategy to become a supplier, launching an “Installer Day” and pushing its hardware through third-party certified installers rather than its own internal teams.

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But late last year, we saw a flicker of life when Tesla announced it would restart solar panel production in Buffalo. Now, we have the full specs of that product, and it looks like Tesla is finally doing what it promised nearly a decade ago: building its own unique solar module.

The new module, listed as TSP-420, appeared on Tesla’s website today.

Made in Buffalo, Finally

The most prominent feature of the datasheet is the statement: “Proudly made on Earth by humans and assembled in Buffalo, New York, in the United States of America.”

“Assembled in Buffalo” does point to someone outside the US producing the solar cells and Tesla assembling the panels at Gigafactory New York in Buffalo.

But this is still significant. Gigafactory New York (originally built for SolarCity and paid for by the state of New York) was supposed to be the largest solar factory in the Western Hemisphere. However, after the acquisition, Panasonic took over manufacturing there before exiting the facility in 2020. Since then, the factory has been mostly used for Supercharger components and Autopilot data labeling.

For the last few years, Tesla has been white-labeling panels from other manufacturers like Q Cells. This new datasheet confirms they are bringing manufacturing back in-house with a proprietary design.

Giga New York is back to being a solar factory to some degree.

The Specs: 18 Power Zones?

The specs show a 415W and 420W module, which is standard for the current market, we previously reported on Tesla adopting 420W panels back in 2021.

However, the technology inside seems different. Tesla claims the new panel features “18 Power Zones” compared to 6 in a standard panel.

Standard half-cut solar cells usually split a panel into two independent sections (top and bottom) to handle shading better. If Tesla is claiming 18 zones, they are likely using a shingled cell design or a custom string layout that allows the panel to maintain output even when significant portions are shaded.

The datasheet also confirms the integration of the Zep-derived rail-less mounting hardware, which Tesla claims allows the panel to sit closer to the roof for a “minimalist aesthetic” – a tech acquired through the Solar City bailout a decade ago.

Electrek’s Take

On one hand, I am happy to see Tesla finally utilizing Gigafactory New York for its original purpose. The “Power Zones” tech sounds genuinely useful for shading issues, and if they can control the manufacturing cost, it could be a competitive product.

There are some smaller panels out there that have 420 watts of capacity, but if it can handle shading better, it could be more efficient.

On the other hand, what does this mean for Tesla’s solar business?

Tesla has spent the last two years firing its solar scheduling teams and canceling customer orders en masse. They explicitly pivoted to third-party installers. Is this panel only for Tesla’s internal crews (which are now skeletal)? Or will they sell this premium, US-made panel to third-party installers?

I think it’s going to be the latter.

If they sell it to third parties, it competes directly with the commodity panels those installers love to use. If they keep it for themselves, they need to rebuild an installation workforce they just spent years dismantling.

It feels like Tesla’s solar strategy is still a bit of a yo-yo. But at least for now, the solar business has a pulse.

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