Tesla made a deal with Panasonic to produce solar cells for its solar roof tiles at Gigafactory 2 in Buffalo, but now we learn that the slow rollout and production ramp-up of Tesla’s new solar products is resulting in Panasonic seeking new buyers for the solar cells produced at Gigafactory 2.
Last year, Tesla has made another manufacturing agreement with Panasonic to accelerate the production of solar products at the factory it inherited from SolarCity in Buffalo following the acquisition of the company.
They called the factory Gigafactory 2 because they aim to produce over 1 gigawatt of solar products at the factory, which also happens to work under a similar deal as Gigafactory 1, where Tesla and Panasonic manufacture batteries.
Panasonic invested in the production of solar cells at Gigafactory 2 and Tesla agreed to buy those cells to put inside the solar roof tiles that it itself manufactures at the location. Panasonic is also separately producing solar modules at Gigafactory 2 for Tesla’s solar retrofit business.
But the slow ramp-up of Tesla’s solar roof tile production is being reportedly outpaced by Panasonic’s solar cell production and the Japanese electronics giant now has to find other buyers for the cells.
Reuters reported today:
“Repeated hold-ups since the Buffalo, New York plant opened last year have forced Tesla’s partner in the joint venture, Panasonic, to seek other buyers for the components it had built to sell to Tesla, according to a Panasonic employee, a former Panasonic employee and a former Tesla employee. The issues have also rattled the faith of state officials in Tesla’s ability to deliver on investment and employment promises it made in exchange for $750 million in state subsidies.”
Panasonic confirmed that it has been selling solar modules produced at the factory to other buyers than Tesla. As for the solar cells, the company says it hasn’t finalized any sales to other buyers than Tesla, but Reuters notes that they have been sending samples to other companies.
Last week, Tesla CEO Elon Musk commented on the rollout of the solar roof – saying that it is now installed at ‘several hundred locations’:
“We now have several hundred homes with the Solar Roof on them and that’s going well. It takes a while to confirm that the Solar Roof is going to last for 30 years and all the details work out, and we’re working with first responders to make sure it’s safe in the event of a fire and that kind of thing. So it’s quite a long validation program for a roof which has got to last for 30, 40, 50 years, but we also expect to ramp that up next year at our Gigafactory 2 in Buffalo. That’s going to be super exciting.”
Tesla later sent us a clarification saying that “several hundred homes with Solar Roof” includes not only homes with solar roof installed but also with their installation scheduled.
It’s unclear how many homes have Tesla’s solar roof now and how many solar roof tiles have been produced.
It sounds like another Tesla product is production constrained.
But that’s when they planned to start installations in volume in summer 2017.
Instead, Tesla started only installing the product at the homes of employees in 2017 and slowly started ramping up installations to customers in 2018.
Based on Musk’s comments, it sounds like they still need to do some more validation before ramping up production of the product and that’s bad timing for Panasonic who reportedly invested $250 million in that plant.
I can understand why they would want to turn to other customers now to sell their product and recuperate some of that investment until Tesla can get it together.