A car travels past photovoltaic panels at the Al Dhafra Solar project, constructed by Electricite de France SA (EDF) and Jinko Power Technology Co. Ltd., in Abu Dhabi, United Arab Emirates, on Tuesday, Jan 31, 2023.
Christopher Pike | Bloomberg | Getty Images
Shares of Chinese solar panel makers surged Wednesday after local media reported that staff linked to Elon Musk had recently visited several photovoltaic suppliers in China, sparking speculation that a high-profile customer could boost demand for advanced products.
The reports fueled talk of a potential business partnership and came days after Musk said he planned to build large-scale solar cell production capacity in the U.S.
Shares of China-based JinkoSolar, one of the world’s largest panel producers, jumped as much as 20% in early trade, hitting their daily limit, according to LSEG data.
Jolywood Suzhou Sunwatt, which makes photovoltaic auxiliary materials, also saw its shares jump 20%.
Other solar panel makers, including Trina Solar and Shenzhen Topraysolar, gained 8.9% and 10%, respectively. The CSI All Share Solar Power Equipment Sub-Industry Index rose 6.8%.
According to local media reports, a team sent by Musk recently visited several photovoltaic companies in China, including those involved in equipment manufacturing, silicon wafers, battery modules and perovskite technology.
The visitors appeared most interested in suppliers developing heterojunction and perovskite technologies — next-generation approaches that aim at improving cell efficiency. Perovskites could eventually lower costs if manufacturing challenges are resolved.
State-backed outlet Cailianshe reported that the visitors were from SpaceX and Tesla. Separately, another state-run outlet, 21st Century Business Herald, reported that JinkoSolar confirmed a visit from a team sent by Musk, but did not elaborate on potential business plans.
CNBC could not independently verify the reports. SpaceX, Tesla and JinkoSolar did not immediately respond to requests for comment.
Wednesday’s rally was driven by a narrative that energy remains the key bottleneck for AI, rather than any change in the companies’ fundamentals, said Ke Zong, a portfolio manager at a Shanghai-based quant fund.
“Musk’s apparent interest in solar has been read as a signal that tech giants are moving upstream into power,” Zong said. “But there hasn’t been an immediate shift in fundamentals such as order books — the move was largely momentum trading and short-covering.”
Musk said during a Tesla earnings call last week that he planned to build 100 gigawatts of solar cell capacity in the U.S. “The solar opportunity is underestimated,” he said.
China dominates global solar manufacturing, but large state-funded investment has fueled a supply glut, pushing module prices sharply lower and accelerating consolidation across the sector.
The solar sector has been grappling with a prolonged price slump and oversupply, squeezing margins even as leading producers continue to add capacity.
Against that backdrop, some manufacturers have expanded production overseas, including in the U.S., where tariffs protect domestic producers from low-cost imports from China and Southeast Asia.
JinkoSolar aims to build more than 12 gigawatts of solar wafer, cell, and module capacity in Southeast Asia by the end of 2030 and operates a factory in Florida capable of producing about 1.2 million solar panels annually.
Following the latest rally, many solar stocks are now “fully valued or overvalued,” said Cheng Wang, equity analyst at Morningstar, while maintaining a positive long-term outlook for the sector.
Even if Chinese suppliers do, in the slight chance, secure contracts linked to SpaceX, they are unlikely to generate a meaningful revenue boost, Wang said, noting that space-based solar remains economically marginal.
“While the concept is fascinating, the scale of space-based solar PV is likely to remain negligible compared with terrestrial installations until the cost of deploying panels into space becomes economically viable.”
