Late Sunday evening, Tesla announced a new partnership with Panasonic in the form of a non-binding letter of intent to manufacture solar cells and modules at SolarCity’s Buffalo ‘Gigafactory’, which the company just took over during the past few weeks.

The company says that the deal, which is between Tesla and Panasonic, will be contingent upon shareholders’ approval of Tesla’s acquisition of SolarCity which is going to a vote on November 17.

They expect to start production at the 1.2 million-square-foot factory in 2017. The plant has also been dubbed a ‘Gigafactory’ like Tesla’s Nevada plant because it has a planned output of over 1 gigawatt of solar power capacity.

The state of New York invested $750 million in the plant, which it actually owns and rents to SolarCity at virtually no cost, but the company has to heavily invest in hiring locally to staff the plant and its whole operations in New York.

SolarCity got the deal from its acquisition of Silevo, a solar cells and modules manufacturer, and it was supposed to build its own modules at the plant, which makes this new deal between Tesla and Panasonic particularly interesting and raises a few questions.

We will look into this more in the coming weeks. In the meantime, here’s Tesla’s announcement in full:

Tesla and Panasonic to Collaborate on Photovoltaic Cell and Module Production in Buffalo, New York

Tesla and Panasonic have entered into a non-binding letter of intent under which they will begin collaborating on the manufacturing and production of photovoltaic (PV) cells and modules in Buffalo, New York. Under this agreement, which is contingent upon shareholders’ approval of Tesla’s acquisition of SolarCity, Tesla will use the cells and modules in a solar energy system that will work seamlessly with Powerwall and Powerpack, Tesla’s energy storage products. With the aid of sales and financing capabilities from SolarCity, Tesla will bring an integrated sustainable energy solution to residential, commercial, and grid-scale customers.

The parties intend for Panasonic to begin PV cell and module production at the Buffalo facility in 2017. Tesla intends to provide a long-term purchase commitment for those cells from Panasonic.

The collaboration extends the established relationship between Tesla and Panasonic, which includes the production of electric vehicle and grid storage battery cells at Tesla’s Gigafactory.

JB Straubel, Chief Technical Officer and Co-founder of Tesla, said “We are excited to expand our partnership with Panasonic as we move towards a combined Tesla and SolarCity. 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.”

Shuuji Okayama, Vice-president, Eco Solutions Company of Panasonic, added, “Panasonic PV cells and modules boast industry-leading power generation performance, and achieve high quality and reliability. We expect that the collaboration talks will lead to growth of the Tesla and Panasonic relationship.”

The continued partnership between Tesla and Panasonic is an important step in creating fully-integrated energy products for businesses, home owners and utilities, and furthers Tesla’s mission toward a sustainable energy future.

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