China restricts solar manufacturing equipment exports to the US
Five people familiar with the consultations said that Chinese officials had held preliminary?talks? with suppliers of equipment for making solar panels, as they considered limiting the exports of most advanced technology to the United States.
A clampdown of this kind would put at risk the investments made by U.S. companies and slow down the race to space-based computing, since China is home to 10 of the top ten'suppliers' for equipment used to manufacture solar cells.
Two sources stated that no rule had been finalised and that the discussions were not yet at the stage where formal feedback was being sought from an industry suffering from severe overcapacity following years of aggressive growth.
China's Commerce Ministry and State Council, or Cabinet, did not respond immediately to faxed comments from.
If adopted, this step could threaten the plans of U.S. firms to expand
This move, if adopted, could undermine plans by U.S. companies, like Tesla, to expand or build new factories in an effort to boost local production.
The move would also expand export controls in a second area of technology in which?China is leading, building on Beijing’s decision to control rare-earth exports last year in response to U.S. Tariffs.
Elon Musk, Tesla's CEO, has been focusing on the production of space-based computers powered by solar panels.
Google and Amazon, two other U.S. tech giants, are also investing in solar energy and energy storage systems on the ground. They're also counting on similar orbital data centers to meet AI's increasing demand for power.
Analysts and executives who follow China's solar industry are preparing for export controls. This is partly because of growing concern over Musk and other efforts to increase solar panel production in the U.S., reducing dependence on China.
A DOWNturn could see the industry lose out to U.S. companies
Xu Xiaohua is the chairman of Anhui Husun Energy and he told Caijing Business Magazine that Musk wants to take advantage of China's solar slump to buy equipment and talent.
He called for greater efforts from Chinese companies to maintain their technological lead.
Huasun didn't immediately respond to a request for comment sent via email.
China's potential curb on imports comes as both sides prepare for a meeting of Donald Trump and Xi Jinping in the Chinese capital, next month. Both sides see this as an opportunity to maintain more stable ties with respect to trade.
Last month, it was reported that Tesla wanted to purchase $2.9 billion worth of equipment from Chinese suppliers like Suzhou Maxwell Technologies. The company was awaiting export approval.
Musk said that solar power can provide all of the United States' electricity needs. Tesla also has set a goal to manufacture 100 gigawatts worth of solar panels on American soil by 2028.
TESLA'S SELF SUFFICIENCY PUSH: A 'NIGHTMARE PROSPECT'
In a recent note, Trivium China, a research firm that focuses on Chinese government policies, stated: "Tesla's success in its solar self sufficiency push could prove to be a nightmare for China’s world-leading manufacturers of solar panels."
It added that not only would the company lose a large customer, they might also face a new, formidable competitor, at a time of financial stress.
Beijing won't stand by while its industrial champions unwittingly help the industrial policies of?rival?countries."
Three sources, who requested anonymity due to the confidential nature of the discussions with regulators, stated that Tesla officials visited Suzhou Maxwell Technologies after a report on the company's conversations with Chinese suppliers.
Two sources reported that regulators were in talks with Suzhou Maxwell Technology about possible restrictions on shipments into the United States. This included high-end equipment required to produce panels of higher efficiency, also known as HJT.
Suzhou Maxwell, and Tesla didn't immediately respond to emails requesting comment.
SOME ASPECTS YET TO EMERGE
It was not possible to determine the extent of any restrictions on other export markets or when licensing requirements could be implemented.
China threatened licensing requirements in 2025 for exports related to high-end battery technology and materials for energy storage systems required by large-scale projects. However, implementation was halted until November of this year.
Two people confirmed that other Chinese solar manufacturers have continued to negotiate with the United States and ship solar manufacturing equipment, including those firms bidding on the Tesla order.
HJT, or heterojunction technology, boosts the power output of solar cells by using a wafer made of crystalline silica sandwiched in between two very thin layers. This allows more electrons to be captured by the sun and converted into electricity. Reporting by China Newsroom and Norihiko Shrouzu in Austin Texas. Editing by Clarence Fernandez.
(source: Reuters)
