T1 Energy Inc. shares fell sharply on Wednesday, declining 7.98% to around $7.79, after short-seller Fuzzy Panda Research published a report alleging that the company purchased over $65 million in solar cells from Trina Solar during the first quarter. The report challenges T1's eligibility for key U.S. manufacturing tax credits, raising questions about the company's reported $9.1 million adjusted EBITDA.
The stock opened at $8.36 after closing Tuesday at $8.46, and traded in a wide range from $7.64 to $8.76 on heavy volume exceeding 20 million shares. The decline comes just a week after T1 Energy had been promoting its expansion into battery energy storage and data-center infrastructure through its planned acquisition of KORE Power.
Fuzzy Panda Research said its report is the first installment of a five-part "whistleblower series." The firm disclosed it holds a short position in T1 Energy and intends to maintain it throughout the series. While short-seller research can uncover real issues, it is inherently biased and should be viewed with caution.
The core of the controversy centers on tax-credit eligibility under U.S. clean-energy laws. The Foreign Entity of Concern (FEOC) rules restrict involvement by certain foreign entities in projects claiming tax benefits. The Treasury Department and IRS have clarified that facilities receiving "material assistance" from banned entities may lose eligibility for credits such as Section 45X, which covers advanced manufacturing production for clean-energy components.
Fuzzy Panda claims it reviewed 26 purchase invoices from T1 Energy dated January through March 31, all of which were for Trina Solar cells. The firm argues that this should reverse T1's first-quarter tax-credit treatment, reducing adjusted EBITDA from a positive $9.1 million to a negative $32.3 million. T1 had reported $9.1 million in adjusted EBITDA for the quarter in its May results.
The timing is particularly challenging for T1 Energy. On Tuesday, Reuters reported that the U.S. Defense Department had added Trinasolar and other Chinese solar and battery companies to a list of entities allegedly linked to China's military. Trinasolar has denied any military connections and said it would seek a correction or file an appeal. Being on the list does not automatically impose sanctions, but it complicates sourcing from these suppliers and increases political sensitivity.
T1 Energy has painted a different picture in its recent disclosures. In May, the company said construction of its G2_Austin facility was on track, with first solar-cell output expected in the fourth quarter of 2026. The company maintained its 2026 guidance for G1_Dallas at 3.1 to 4.2 gigawatts. CEO Dan Barcelo emphasized hitting key construction milestones. T1 posted $3.9 million in net income from continuing operations and ended the quarter with $123.7 million in cash and restricted cash.
The company is also pursuing a significant acquisition. On June 3, T1 announced it would acquire KORE Power at an enterprise value of approximately $32 million, including equity, cash, and assumed debt. The deal aims to position T1 in the battery storage and AI data-center infrastructure markets. Barcelo said KORE's NRI division adds extraordinary capability, knowledge, and customer relationships for storage and power infrastructure.
The KORE transaction includes about $9.6 million of closing consideration in T1 common stock, plus a potential $9.6 million stock earn-out and a possible $5.5 million stock payment linked to a receivable. The share amounts depend on a 10-session volume-weighted average price, meaning volatility in T1 shares will affect the deal's dilution math.
There is a counter-narrative for investors. After Fuzzy Panda's earlier short report in May, Roth Capital analyst Philip Shen fired back, calling it "Another Misleading Short Report; Buy the Dip," as reported by PV Magazine USA. The stock bounced sharply the next day. However, Wednesday's report is different, centering on alleged invoice evidence and tax-credit accounting rather than just claims about corporate structure and ownership.
The risks are now two-sided. If the invoice claims are verified, T1 could face questions about its tax-credit status, profit figures, financing for G2_Austin, and disclosure of sourcing practices. The company's own filings already warn about Section 45X credit hurdles, a thin supplier base, overseas material flows, tariffs, trade shifts, cash needs, and closing the KORE acquisition. But if the allegations are not proven, the stock could rebound on the narrative of U.S. manufacturing, storage, and data-center growth.
Pressure is building on T1 Energy. Fuzzy Panda plans to release more installments in its whistleblower series, while T1 must close the KORE deal in the second quarter, secure larger financing for G2_Austin, and maintain its timeline for first cell production in Q4 2026. Observers note that the company will need to address sourcing concerns before financing becomes the more pressing issue.
