Tesla and battery partner Panasonic plan to deepen ties with a new collaboration on solar cell and module production, but only if Tesla’s proposed SolarCity acquisition is approved.
Late Sunday, Tesla announced that Panasonic has signed a non-binding letter of intent to manufacture solar cells and modules at SolarCity’s factory in Buffalo, New York, which is slated to be the largest solar panel factory in North America. The plant is expected to employ 1,460 workers and produce up to 10,000 panels per day.
Under the agreement, Panasonic would begin making PV solar cells and modules at the Buffalo facility in mid-2017. The Japanese electronics company would effectively run the plant in conjunction with Tesla-SolarCity. In return, Tesla would provide a long-term purchase commitment for Panasonic solar products for use in a solar energy system that will work “seamlessly” with Tesla’s stationary battery units, the Powerwall and the Powerpack, according to the company statement.
“We are excited to expand our partnership with Panasonic as we move toward a combined Tesla and SolarCity,” said JB Straubel, Tesla’s chief technical officer, said in a statement. “By working together on solar, we will be able to accelerate production of high-efficiency, extremely reliable solar cells and modules at the best cost.”
Bloomberg reports that the deal would also be a win for Panasonic, which has shifted its focus away from consumer electronics products and onto housing, automotive information systems and vehicle batteries.
“Panasonic PV cells and modules boast industry-leading power generation performance, and achieve high quality and reliability,” said Shuuji Okayama, vice president of Panasonic’s Eco Solutions Company. “We expect that the collaboration talks will lead to growth of the Tesla and Panasonic relationship.”
Panasonic currently supplies lithium-ion cells for use in Tesla’s electric vehicles. The two companies are also partnering on the development of Tesla’s $5 billion battery Gigafactory under construction near Reno, Nevada. The giant manufacturing facility will build batteries for Tesla’s mass-market electric car, the Model 3, set for release in 2017.
SolarCity's Buffalo plant has a targeted capacity greater than 1 gigawatt per year, which could make it Tesla’s second Gigafactory if the acquisition is approved. SolarCity announced plans to build a manufacturing facility upon acquiring Silevo in 2014, and is now under pressure to complete the $900 million solar plant that benefited from $750 million in incentives from New York state. The facility was initially intended to come on-line in early 2017. The Buffalo News reports that the opening date has been delayed to the second or third quarter of next year.
The Panasonic announcement helps to boost momentum around the solar production facility, as well as Tesla’s $2.6 billion bid to buy SolarCity -- a move that has been under intense scrutiny. Tesla and SolarCity shareholders said last week that they will vote on the proposed acquisition on November 17, with additional integration plans released ahead of time.
Colin Rusch, a top Tesla analyst for Oppenheimer, issued a note last week that found the automaker would need to raise $12.5 billion in capex to complete the acquisition. Elon Musk, Tesla CEO and SolarCity chairman, insists neither company would need to raise equity or debt before the end of the year, and “probably not in Q1 2017 either.”
Musk tweeted on Sunday that a separate Tesla announcement originally scheduled for Monday, October 17 would be delayed until Wednesday, October 19. Musk said the product "needs a few more days of refinement." The only clue the CEO has offered on the product unveiling to date is that it would be "unexpected." Predictions range from a next-generation home battery product, to new autonomous vehicle technology, to something Model 3-related.
In addition, on October 28, Tesla plans to unveil “a solar roof product, which along with Powerwall 2.0, will show the kinds of products that the combined company will be able to create.”
Check out the stories below for other related Tesla-SolarCity news: