Tesla Talking To Chinese Suppliers For Elon Musk's Solar Project: Report

Tesla’s (TSLA) solar project reportedly is searching for suppliers from China — by far the world’s leader in solar energy production. As part of its vast AI ambitions and penchant for vertical integration, Tesla intends to build a massive solar cell production facility.

To turn that into a reality, Tesla is in talks to purchase $2.9 billion in materials from Suzhou Maxwell Technologies, according to Reuters. Tesla would use the solar energy from the project to power the data centers needed to run the AI systems behind its self-driving cars and future plans for humanoid robots.

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On Friday, Tesla stock fell more than 2% Friday morning, at six-month lows. Shares are down about 5% so far this week, on pace for a fifth consecutive weekly decline.

Tesla Solar Fab

Tesla intends to rely on a network of solar energy and batteries to power its AI programs.

“Solar/battery/EVs is the future,” Musk wrote on X in response to a post about how electric vehicles reduce reliance on oil.

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On a January earnings call, CEO Elon Musk said Tesla’s solar project would eventually produce 100 gigawatts of solar cells per year.

“The solar opportunity is underestimated,” Musk said on the January investor call. “We think the best way to add significant energy to the grid — let’s say it’s powering AI data centers — is solar and batteries on Earth, and solar in space. So that’s why we’re going to work towards getting 100 gigawatts a year of solar cell production, integrating across the entire supply chain from raw materials all the way to finished solar panels.”

Tesla And Suzhou Maxwell

Suzhou Maxwell is the world’s largest producer of the screen-printing equipment that applies silver or aluminum pastes to photovoltaic materials. In essence, Suzhou Maxwell sells the machinery used to build solar panels. The fact that Tesla is in talks with Maxwell Suzhou seems to indicate it is preparing to make good on Musk’s remarks to build a vertically integrated solar energy facility.

Suzhou Maxwell has been working with China’s commerce ministry to secure an export approval for its equipment, should the deal go through, according to Reuters.

The U.S. imposes stiff tariffs on Chinese solar products, but solar manufacturing equipment is excluded.

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The solar project is part of Tesla’s efforts to find buoy energy supply, a key bottleneck for AI data centers. Musk and Tesla say the solar energy project will help solve that problem. Through his other companies SpaceX and xAI, which are merging, Musk also says he has plans to build data centers in space.

“The limiting factor will shift from chips to energy on Earth, then back to chips when space solar (star) power is unlocked,” Musk wrote on X.

Tesla Terafab

Tesla is also working on building its own semiconductor factory, dubbed “Terafab.” That project is supposed to begin this month, according to Musk.

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The Terafab would produce AI chips used for Tesla’s Full Self-Driving software, Cybercab robotaxi, and Optimus robots. Tesla already designs some chips in-house, but outsources production to Taiwan Semiconductor Manufacturing Company (TSM) and Samsung. The Terafab would be the first time Tesla did physical production of chips at its own facilities.

Typical construction timelines for semiconductor fabs are between three to five years. Costs run between $10 billion and $20 billion. In 2026, Tesla plans to spend $20 billion in capex, more than double last year’s total. That figure would not include the costs of the solar project and the Terafab, according to CFO Vaibhav Taneja.

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