Tesla’s Solar Ambitions at Risk as China Eyes Export Limits
It's a struggle that feels very much like the unstoppable force meeting the immoveable object.
China is considering new limits on exports of advanced solar manufacturing equipment to the United States at the same time as American companies race to rebuild domestic solar capacity.
The result is a deepening power struggle over who controls the hardware behind the next era of energy and computing.
According to Reuters news agency, Chinese officials have held initial talks with providers of equipment to make solar panels as they weigh restricting sales of the most advanced technology to the US.
Such a clampdown would risk investments by US firms and set back a race for space-based computing, as China, estimated to make more than 80% of the world's solar panel components, is also home to the top 10 suppliers of equipment to make solar cells.
No rule has been finalised, and the talks have not advanced to the stage of canvassing formal feedback from an industry grappling with severe overcapacity after years of aggressive expansion.
For global supply chains, the move highlights how Beijing’s grip on upstream solar technology has become a strategic lever rather than a purely commercial advantage.
The growing US-China rivalry
If adopted, such a step could threaten plans by US firms such as Tesla to build new factories or expand existing ones in efforts to boost local production.
It would also widen export controls in another area of technology where China has a lead, building on Beijing's move to control rare earth exports in response to US tariffs.
The rivalry between China and the US has spilled into the race to produce space-based computing powered by solar panels, a focus for Tesla CEO Elon Musk, and into the scramble to power artificial intelligence data centers.
Other US tech companies such as Google are investing in ground-based solar and energy storage systems even as they count on similar orbital data centres to satisfy AI's growing demand for power.
Analysts who track China's solar industry and executives have braced for export controls, in part because concern is growing over efforts by Musk and others to boost solar panel production in the US, reducing reliance on China.
How Musk is exploiting China's solar downturn
Musk seeks to exploit China's solar downturn to acquire equipment and talent, Xu Xiaohua, Chairman of Anhui Huasun Energy, told the Caijing business magazine this year. He called for greater efforts by Chinese companies to retain their lead in technology.
At the same time, US manufacturers are trying to reposition their own supply chains to reduce exposure to any single country.
Suniva, the largest and oldest US manufacturer of high-efficiency monocrystalline silicon solar cells, has entered agreements to bring a 4.5 gigawatt solar cell manufacturing facility to Laurens, South Carolina, with a projected opening in the second quarter of 2027.
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The new facility, coupled with Suniva’s existing plant at its headquarters in metro Atlanta, will bring the company’s total domestic solar cell manufacturing capacity to over 5.5 gigawatts annually, which it says will be the largest of any merchant solar cell manufacturer in the US.
Suniva presents this expansion as both an industrial opportunity and a supply chain hedge.
How will America compete?
As the United States’ energy demands reach a critical juncture, access to energy will determine how America competes for generations to come. Suniva’s expansion represents a direct contribution to the nation’s energy security.
Tony Etnyre, Suniva CEO, says: “Suniva has long championed US leadership in solar manufacturing. Solar energy is the fastest and most economical way to grow our nation’s energy supply.
“Our expansion means that domestically produced renewable energy will do more than ever to secure America’s energy future. We are proud to partner with the state of South Carolina on this vital initiative.”
Suniva casts itself as an ‘American-first’ counterweight in a sector where production has largely shifted offshore.
Founded in 2007 out of US Department of Energy-funded research at Georgia Tech’s University Center for Excellence in Photovoltaics, it is the only merchant solar cell manufacturer in the US that is both American-owned and American-operated.
By producing solar cells on American soil with American workers under American ownership, Suniva argues it can ensure that the clean energy powering American homes and businesses is not subject to foreign supply chain risk or geopolitical disruption.
China's solar dominance
Matt Card, President and COO at Suniva, says: “At this moment in history, the question of where our energy comes from - and who controls the supply chain that delivers it - is among the most consequential questions America faces.
“Suniva’s answer is straightforward: we build it here. With this expansion, Suniva contributes over 5.5GW of American-made solar cell capacity annually to a grid that increasingly depends on it. That’s not just good business. That’s a national imperative.”
The message from both sides is clear. China is prepared to use its dominance in solar components and production equipment as a policy tool.
The US is beginning to push back by localising more of the solar value chain on its own soil.
Yana Hryshko, Head of Solar Supply Chain Research at Wood Mackenzie Power and Renewables, says: "The US and most of the global solar industry remain heavily dependent on Chinese equipment manufacturers across the value chain.
"While there are a handful of non-Chinese equipment suppliers, their technologies are typically several generations behind China’s leading-edge solutions, and many still rely on critical components sourced from China.
"There are some mitigation strategies, such as sourcing second-hand equipment from Southeast Asia or India, but these come with clear limitations in terms of efficiency and technological relevance.
"This challenge is particularly acute in cell manufacturing, where advanced equipment is even harder to secure outside of China, making rapid and meaningful supply chain de-risking difficult in the near term."
The outcome of this struggle will decide not just where panels and cells are made, but who controls the supply networks that power the world’s grids, data centres and emerging space-based infrastructure.