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Tesla and Panasonic working on deal to reopen idled Osaka factory and supply solar panels to SolarCity, report says [Updated]


Beyond Tesla and Panasonic’s collaborations in battery manufacturing at the Gigafactory in Nevada and solar cell manufacturing at the factory in Buffalo, the two companies reportedly struck a deal this week for Panasonic to manufacture complete solar panels for Tesla. The contract is reportedly significant enough that Panasonic is reopening its idled solar module factory in Osaka, Japan.

Panasonic is a major manufacturer of solar panels with several factories in Asia, but earlier this year it decided to shut down one in Osaka, citing falling demand for rooftop solar installation in Japan following changes in net metering tariffs.

Last night, Japan’s Nikkei reported that Panasonic is reopening the factory following a contract to supply panels to Tesla’s SolarCity:

The Osaka-based manufacturer will build the panels for Tesla at its idled Kaizuka factory near here [Osaka], and in Malaysia. It plans to tap into Tesla subsidiary SolarCity’s sales network in the U.S. market.

We’ve asked Tesla and Panasonic to comment on the report and we will update if we get an answer.

Update: a source familiar with the matter says that nothing has been inked yet and it’s still in “early stages”.

The report stated that the deal is not official yet, but the companies plan to announce it this month:

Panasonic and Tesla aim to make the supply deal official this month. They have been discussing details of the partnership since announcing in October that a tie-up was under consideration. The Kaizuka plant would restart sometime next year.

Aside from its recent pilot production of panels ahead of launching volume production at its factory in Buffalo, SolarCity doesn’t manufacture its own solar panels. The company buys them from different suppliers, including from Renewable Energy Corporation (REC) in Norway and Chinese suppliers.

The move could mean that SolarCity will start installing solar modules with higher efficiency even prior to installing its own panels, which they claim have record-breaking efficiency – a claim disputed by Panasonic itself.

What is becoming clear is that the relationship Tesla is building with Panasonic over solar hardware is very similar to the relationship it already has with the company over battery manufacturing.

At the Gigafactory in Nevada, Panasonic manufactures the battery cells and Tesla uses those cells to make its battery packs, but the automaker plans for the battery pack output to be greater than the cell output of the plant and to compensate with cells produced outside of the factory – presumably including from Panasonic’s other battery factories.

The solar deal with Panasonic is already similar in the sense that Panasonic helps Tesla/SolarCity manufacture solar cells to build their solar modules at the factory in Buffalo. If the Nikkei report is true, they will also now supply solar modules directly to the company. The same report also stated that Panasonic is “speeding up preparations” for its manufacturing collaboration in Buffalo:

Panasonic is also speeding up preparations for the start of joint operations at a SolarCity panel factory in New York state. The Japanese company will dispatch technicians to help get the plant running. In the future, the duo will cooperate on developing more efficient panels.

We reported earlier this week that the US installed a record amount of solar power – 191% growth – during the last quarter and the potential for rooftop and residential solar is still enormous. It could provide 25% of the US electricity needs (up from <1%).


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