Tesla and Panasonic end solar deal at Gigafactory New York ahead of battery event

Several reports coming from Japan are announcing that Tesla and Panasonic are ending their solar cell production deal at Gigafactory New York ahead of Elon Musk holding an event at the factory.

In 2017, Tesla 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 the factory, which has recently been renamed Gigafactory New York, and Tesla agreed to buy those cells to put inside the solar roof tiles, now called Solarglass, that Tesla manufactures at the location. Panasonic is also separately producing solar modules at Gigafactory New York, for Tesla’s solar retrofit business.

The deal hasn’t panned out exactly as planned.

Tesla hasn’t been buying a lot of solar modules from the plant, and its solarglass production ramp has been extremely slow.

Furthermore, Tesla has reportedly been using solar cells from other manufacturers in its solar roof tiles.

Now reports from Reuters and Nikkei both state that Tesla and Panasonic are ending their solar cell production deal at the factory in New York.

Nikkei reported today:

Tesla and Panasonic are scrapping their partnership in producing solar cells after years of struggling to ramp up output at the Gigafactory 2 in upstate New York.

The deal at Gigafactory Nevada to produce battery cells for Tesla’s Model 3 and Model Y is reportedly intact. The report also states that Tesla is considering bringing new production to Gigafactory New York, and they are not expecting to have issue fulfilling their employment requirements with the state, which paid for the factory.

We contacted Tesla about the reports, and we will update if we get more information.

The news comes soon after Elon Musk announced a “Tesla April company talk” to be held at Gigafactory New York, and it is expected to be related to Tesla’s previously announced “Battery Investor Day,” which should involve a new battery announcement.

When announcing the event, Musk also said that Tesla will be expanding solar roof installs internationally, and that it will become an important product for the company.

Electrek’s Take

This is really interesting. Obviously, the deal wasn’t going great, and yet Tesla is now finally ramping up solar roof tile production at the factory.

It sounds like Tesla might be using other cells for the solar roof tile V3 and cutting Panasonic out of it.

What is most interesting is that if Panasonic is not producing cells in Gigafactory New York, it should leave room for other things, as the report said.

Now Tesla is holding an event at the factory and it might be about batteries. Does that mean Tesla is going to produce batteries at the factory? Not necessarily, but it’s an interesting thought. We might know more about that soon. Stay tuned.