Nov 1, 2016: With the aim to strengthen their partnership, Tesla Motors and Panasonic (Tesla’s chief battery partner) have plans to enter the solar panel market. The solar plan will hit off if Tesla’s proposed merger with SolarCity wins shareholder approval in November 17, 2016.
In October, 2016 Tesla expressed its plans to work with Japan-based Panasonic to manufacture photovoltaic modules and cells in Buffalo, New York, where SolarCity is building the biggest solar panel factory in North America. The $900 million SolarCity facility churns out around 10,000 units each day and employs 1,460 workers. It has received a whopping incentive of $750 million from the state.
Post merger plans and benefits
If the merger works on their favor, Tesla and Panasonic are hoping to be accelerate production of high-efficiency, reliable solar modules and cells at the most favorable cost.
Panasonic will begin to manufacture solar cells and modules in Buffalo by 2017. These solar devices will be used for a solar energy system to charge Tesla’s Powerpack and Powerwall stationary electricity storage units, according to a Tesla spokesperson. Panasonic will also manage the Buffalo factory in coordination with Tesla-SolarCity.
On the other hand, Tesla will make a long-term pledge to purchase solar cells produced in Buffalo factory from Panasonic. However, Tesla did not give details as to whether Panasonic would finally buy the Buffalo factory, which is under construction.
Following the pressure to obtain additional funds, SolarCity postponed the launch of the Buffalo factory from 2016 to the second quarter of 2017. This postponement raised concerns among New York investors and officials with regards to the fate of the factory.
Partnering with SolarCity and Tesla will cost around $2.6 billion and, the merger proposal has received mixed support from the financial community. Tesla CEO Elon Musk, who is also SolarCity’s chairman, argues that a merger creates significant synergies. Nonetheless, combining the two cash-intensive businesses may delay profitability for Tesla in the near future.
With the aim to attract shareholders and the general Tesla recently announced that it will soon launch a solar roof product, which will demonstrate the types of products that the combined company can create. Further, Musk postponed a secret Tesla product announcement, which was scheduled on October 19m 2016.