Tesla (TSLA) shares failed to shine today on fears that its plans to operate solar satellites in space could be thwarted by Chinese plans to limit exports of vital equipment including panels.
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According to Reuters, Chinese officials are talking to providers of equipment to make solar panels as they weigh up whether to limit exports of the technology to the U.S.
It is understood that no decision has been reached and that the talks have not advanced to the “stage of canvassing formal feedback from an industry grappling with severe overcapacity after years of aggressive expansion.”
China is pivotal in the solar supply chain. It is estimated to make more than 80% of the world’s solar panel components and is also home to the top 10 suppliers of equipment to make solar cells.
An export clampdown would cast quite the shadow over plans by U.S. firms, such as Tesla, to ramp up solar energy production, both on Earth and in Space.
Shadow Over Tesla Plans
Earlier this year, Tesla boss Elon Musk said that the group aims to produce 100 gigawatts of solar cells per year to help power data centers, a level that would make the company the largest solar manufacturer in the United States.
“The solar opportunity is underestimated. We’re going to work towards getting 100 gigawatts a year of solar cell production, integrating across the entire supply chain from raw materials to already-finished solar panels,” Musk has said. He has also talked up the potential of space-based, solar-powered satellites producing power at an industrial scale. The company is already becoming a leading player in battery storage, which can often be built alongside solar plants to ensure energy produced isn’t wasted.
Musk is reportedly eyeing up U.S. solar manufacturing sites but is also dependent on Chinese components.
Tesla Makes China Nervous
Indeed, last month he was reportedly in talks to purchase about $2.9 billion in solar manufacturing equipment from Chinese suppliers. According to Reuters, Tesla has asked multiple Chinese companies to deliver solar equipment by this autumn, with some shipments expected to go to Texas.
That deal could now be at risk, with China said to be nervous about Tesla’s plans. “Tesla succeeding in its solar self-sufficiency push could prove a nightmare for China’s world-leading solar manufacturers,” research firm Trivium China, focused on Chinese government policy, said in a note this month. “Beijing won’t sit idly by as its industrial champions inadvertently aid the industrial policies of rival countries.”
Is TSLA a Good Stock to Buy Now?
On TipRanks, TSLA has a Hold consensus based on 13 Buy, 11 Hold and 6 Sell ratings. Its highest price target is $600. TSLA stock’s consensus price target is $402.29, implying a 10.46% upside.
