Chinese solar stocks rise after reports Musk’s staff visited suppliers

Shares of Chinese solar panel makers soared on Wednesday after local media reported that staff associated with Elon Musk recently visited several Chinese solar power suppliers, fueling speculation that high-profile customers could boost demand for advanced products.

The report spurred talk of a potential business partnership and came days after Musk said he plans to build large-scale solar production capacity in the United States.

China-based stocks Jinko SolarThe company, one of the world’s largest panel producers, soared as much as 20% in early trading, hitting its daily high, according to LSEG data.

Jollywood Suzhou Sunwat, which makes solar power generation supplements, also saw its stock price rise 20%.

Other solar panel makers such as Trina Solar and Shenzhen Toplay Solar rose 8.9% and 10%, respectively. The CSI All-Stock Solar Power Equipment Sub-Industry Index rose 6.8%.

According to local media reports, a team sent by Mr. Musk recently visited several solar power companies in China, including those involved in equipment manufacturing, silicon wafers, battery modules, and perovskite technology.

Visitors seemed most interested in suppliers developing heterojunction and perovskite technologies, next-generation approaches aimed at improving cell efficiency. Perovskites could ultimately reduce costs if manufacturing challenges are resolved.

Government-backed news organization Cailianshe said the visitors were from SpaceX and tesla. Separately, 21st Century Business Herald, another state-run media outlet, reported that JinkoSolar acknowledged the visit of a team sent by Mr. Musk, but did not elaborate on potential business plans.

CNBC could not independently verify the report. SpaceX, Tesla and JinkoSolar did not immediately respond to requests for comment.

Ke Zhong, a portfolio manager at a Shanghai-based quantitative fund, said Wednesday’s rally was driven by the theory that energy remains the main bottleneck for AI, rather than any change in company fundamentals.

“Mr. Musk’s apparent interest in solar power is being interpreted as a sign that the tech giants are moving into the upstream power sector,” Zhong said. “However, there was no immediate change in fundamentals such as the order book. The movement was primarily momentum trading and short covering.”

“The solar opportunity is undervalued,” Musk said on Tesla’s earnings call last week, saying the company plans to build 100 gigawatts of solar capacity in the United States.

China is the leader in global solar power production, but large-scale state investments are fueling oversupply, sharply lowering module prices and accelerating consolidation across the sector.

The solar power sector has been plagued by a long period of low prices and oversupply, squeezing margins even as major producers continue to add capacity.

Against this backdrop, some manufacturers are expanding production overseas, including in the United States, where tariffs protect domestic producers from lower-cost imports from China and Southeast Asia.

JinkoSolar aims to build more than 12 GW of solar wafer, cell and module production capacity in Southeast Asia by the end of 2030, and operates a factory in Florida that can produce approximately 1.2 million solar panels annually.

Morningstar equity analyst Chen Wang said many solar stocks are now either “fully valued or overvalued” after the recent rally, but maintained the long-term outlook for the sector is positive.

Even if there is a slim chance that a Chinese supplier secures a SpaceX-related contract, it is unlikely to generate meaningful revenue growth, Wang said, noting that space solar power remains economically limited.

“While the concept is attractive, the scale of space-based solar power generation is likely to remain negligible compared to ground-based solar power generation until the cost of deploying panels in space becomes economically viable.”