Tesla's Solar Factory Exports 'Great Majority' Of Solar Cells

Galtero Lara
May 16, 2019

Tesla's 2016 acquisition of SolarCity is looking worse and worse.

The relationship between Tesla and Panasonic was also recently been thrown into question after a report from the Nikkei Asian Review that alleged the Japanese company was freezing its investments in Gigafactory 1.

The overwhelming majority of the solar cells produced at the facility are now being sold overseas rather than being used in Tesla's "Solar Roof" photovoltaic product, according to a Reuters report on Wednesday, citing a letter to U.S. customs officials from Panasonic, Tesla's partner on the plant.

Last month, Tesla was said to be cutting the prices of its solar panels by as much as 38 percent below the national average in a bid to regain ground in the solar market. But the line appears to have been a flop. Only a few others were connected in the northeastern United States, according to a former Tesla employee with knowledge of the matter, who was laid off during staff cuts earlier this year and asked not to be named. But the company must add hundreds more workers in NY to meet next year's target. But a company official said in an email "the number of solar roofs you cite in the story is low and unrepresentative as we are actively installing the Solar Roof in eight states now".

The background: Tesla bought SolarCity for $2.6 billion in late 2016, in a deal that was heavily criticized because of SolarCity's huge debt load and Tesla chief executive Elon Musk's connections to the company.

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Tesla declined to comment on the company's purchases of cells from Panasonic and would not provide figures for Solar Roof installations.

Solar struggles: Tesla has been struggling to get production up and running, and gain ground in a solar space dominated by low-priced panels produced overseas, primarily in China.

A worker is seen outside the Tesla Inc. The team also faced difficulties with the appearance and performance of the Solar Roof tiles.

Panasonic's Canal said foreign solar panel manufacturers want the Buffalo plant's cells because solar panels assembled overseas with American-made cells can be shipped to the United States tariff-free, according to USA trade rules implemented last fall. Panasonic has also sought other customers for its Buffalo-made panels. While Panasonic has been making Solar Roof cells, Tesla "took issue with their aesthetics and cost" and had turned to a Chinese supplier as well, Bloomberg reported, citing several sources.

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