China Weighs Curbs on Solar Equipment Exports to US, Threatening Tesla’s $2.9 Billion Deal

China makes more than 80% of solar panel components

Tesla’s $2.9 billion purchase could be hit

Could open a door for Korean energy companies

China is considering restricting exports of solar manufacturing equipment to the US, a move aimed at checking Washington’s push for solar self-sufficiency and preserving Beijing’s dominance in the market. After tightening control over rare earths, China is increasingly using export curbs to strengthen its leverage over global supply chains.

Chinese authorities are weighing limits on exports of advanced solar technology to the US, Reuters reported on April 16. They have held preliminary talks with suppliers of solar panel manufacturing equipment. The discussions come as the US moves to expand domestic solar panel production against the risk of Chinese export controls.

China produces more than 80% of the world’s solar panel components. The top 10 suppliers of solar cell manufacturing equipment are all Chinese companies.

If China imposes export curbs on the US, plans by American companies including Tesla to build or expand factories could be disrupted. Elon Musk, Tesla’s chief executive officer, has said solar energy could meet all US electricity demand, including for data centers. Tesla is seeking to buy $2.9 billion of solar panel and cell manufacturing equipment from Chinese companies to expand solar power capacity in the US.

Reuters said China’s existing export controls on rare earths, imposed in response to US reciprocal tariffs, suggest Beijing could broaden restrictions to other technologies where it holds a competitive edge.

Some expect Chinese export controls on the US to benefit Korean companies in the short term. As the US looks for alternative suppliers to reduce reliance on China, Korean energy companies may gain limited opportunities.

According to the European Union Chamber of Commerce in China, Beijing introduced 30 export restriction measures from 2021 through last year, up from 11 in the previous five-year period.

As the US raises barriers to exports of advanced technologies such as semiconductors to China, Beijing has pushed back by tightening control over supply chains including rare earths. Last year, it used export controls on critical minerals to pressure US President Donald Trump into agreeing to a truce in the tariff war with China. More recently, Beijing has increased supply-chain pressure on foreign companies. According to the business community in Beijing, the Chinese government began restricting supply-chain investigations by foreign companies this month. Foreign companies that collect data on Chinese firms or seek to verify supply chains can now be treated as threats to national security.

Kim Eun-jung, Beijing correspondent, Korea Economic Daily, kej@hankyung.com