Key insights
- Jefferies reports Tesla is in late-stage negotiations to acquire $2.9B in solar manufacturing equipment from Chinese suppliers, potentially pressuring First Solar (FSLR). The equipment would support Tesla's 100-gigawatt domestic solar manufacturing goal. FSLR shares are down 27% YTD, and analysts have revised earnings downwards. While initial production may be for internal Tesla use, this development suggests a sooner-than-expected and more meaningful step from Tesla than anticipated, posing a competitive threat to First Solar.
Investing.com - Tesla is in late-stage negotiations to acquire nearly $2.9 billion of solar manufacturing equipment from Chinese suppliers as part of its 100-gigawatt domestic solar manufacturing capacity objective, according to Jefferies.
The equipment under discussion would be used for cell production and panel assembly domestically, with shipments potentially arriving as soon as the end of this year. Suzhou Maxwell Technologies, Shenzhen S.C New Energy Technology and Laplace Renewable Energy Technology are among the potentially involved parties.
Jefferies said the development represents "a potentially incrementally negative data point" for First Solar (NASDAQ:FSLR). The firm noted that since Tesla’s initial 100-gigawatt announcement, investors have questioned both scale and timing.First Solar shares have declined 27% year-to-date to $189.92, with the stock trading at a P/E ratio of 13.32. According to InvestingPro analysis, the company remains undervalued relative to its Fair Value, appearing on the platform’s most undervalued stocks list. Nine analysts have recently revised earnings downwards for the upcoming period, one of several key insights available in the comprehensive Pro Research Report.
The equipment may require approval from Beijing before export and is likely subject to U.S. import restrictions. At least some of the involved suppliers specialize in crystalline silicon-based cell production.
Jefferies said it views initial production as potentially geared toward internal consumption by Tesla. The latest data point suggests a sooner than expected and more meaningful step from Tesla than investors initially anticipated.
In other recent news, First Solar has released its fourth-quarter earnings, revealing results that did not meet expectations. The company reported earnings that were 6% below projections and provided 2026 revenue guidance of $4.9 billion to $5.2 billion, which was 17% below Street expectations and indicated a 3% year-over-year decline. Analysts have responded to these developments with various adjustments to their ratings and price targets. Deutsche Bank downgraded First Solar to Hold from Buy, citing a weak outlook, and lowered its price target to $245 from $300. Similarly, GLJ Research downgraded the stock to Hold from Buy due to disappointing 2026 guidance. Meanwhile, Guggenheim reduced its price target to $269 from $312, maintaining a Buy rating, and Barclays cut its target to $228 from $279 while keeping an Overweight rating. Jefferies also lowered its price target to $205 from $260, maintaining a Hold rating, highlighting the weak guidance and limited visibility on recovery. These recent developments have prompted reassessments by several analyst firms.
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