Tesla and Panasonic Strengthen Partnership Through Solar Plant Deal

Panasonic has invested more than $256 million in Tesla’s Buffalo, N.Y., solar production facility, further strengthening ties between the two companies.

The two companies finalized an agreement on jointly manufacturing photovoltaic (PV) cells and modules at the Buffalo factory. Production of the first PV modules are scheduled to start next summer, with the goal of ramping up to 1 gigawatt of module production by 2019. Panasonic’s PV cells will be used in solar glass tile roofs and Tesla’s energy storage products, Powerwall and Powerpack.

The two companies signed off an agreement that had been initially discussed in October. Tesla and Panasonic had first signed a non-binding letter of intent to collaborate on PV cells and modules in Buffalo. The deal was contingent upon shareholders’ approval of Tesla’s acquisition of SolarCity, which was completed in November.

SEE ALSO:  Tesla and Panasonic Planning on Opening Solar Plant in Buffalo

The Buffalo factory was originally intended to be a SolarCity plant, according to Wall Street Journal coverage in October. While the joint announcement posted in Tesla’s blog was vague about the Buffalo plant, it appears that it will be operated by its SolarCity subsidiary.

“As Tesla and Panasonic begin production, Buffalo will continue to expand Tesla’s American manufacturing base and create thousands of new jobs in the coming years. Tesla reaffirms SolarCity’s commitment to create over 1,400 jobs in Buffalo – including more than 500 manufacturing jobs. Panasonic, with its technological and manufacturing expertise in PV production, will also work with Tesla on developing PV next generation technology at SolarCity’s facility in Fremont, CA,” according to Tesla’s blog post.

Another less-than-clear point made in the Tesla post is how the solar panels will be marketed. It appears that Panasonic will be supplying PV cells and modules to SolarCity’s innovative rooftop panels that will be tied into existing roof tiles. In October, Tesla CEO Elon Musk demonstrated how this new type of SolarCity roof panel will come to market next year. Using a backlot at Universal Studios Hollywood, Musk stood in front of a movie screen showing a wide range of typical rooftops that the new solar power product can offer homeowners.

“These high-efficiency (Panasonic) PV cells and modules will be used to produce solar panels in the non-solar roof products. When production of the solar roof begins, Tesla will also incorporate Panasonic’s cells into the many kinds of solar glass tile roofs that Tesla will be manufacturing,” Tesla reported in its blog.

Automotive News also reported that Tesla is making a long-term purchase commitment from Panasonic as part of the agreement that was just made.

Another interesting point made in the news story is that Panasonic is the exclusive longtime partner to supply batteries for the upcoming Model 3. That battery will be produced at the new Gigafactory in Nevada. The Japanese electronics company is also the exclusive supplier of batteries to Tesla’s Model S and Model X.

Tesla had been in talks with LG Chem, Samsung, and SK Innovation about possibly outsourcing some of the battery supply for the Model 3, but it appears that Panasonic will be the only supplier for the Model 3’s lithium-ion battery pack.

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