IN BRIEF: Tesla Motors Inc. announced plans to collaborate with Panasonic Corp. to manufacture solar-energy components in New York. According to the non-binding letter of intent, Tesla will use the cells and modules in a solar energy system that will work with its energy storage products Powerwall and Powerpack.
The Tesla Panasonic collaboration, which was announced in a blog post on Tesla’s website, also mentions that it will extend the production of electric vehicle and grid storage battery cells at Tesla’s Gigafactory. The production of the cells and modules for solar energy systems will begin in 2017 at SolarCity’s factory in Buffalo, New York.
The collaboration is a huge win for Panasonic which has shifted away from consumer electronics products to focus on housing, car information systems and car batteries. Additionally, Panasonic is already working with Seattle tech company to supply batteries for the Tesla Model 3. The collaboration deepens the existing relationship between Tesla and Panasonic. Currently, both are jointly building a $5 billion lithium-ion Gigafactory in Nevada. Tesla intends to secure a long-term purchase commitment for photovoltaic cells from Panasonic.
Elon Musk, for his combined vision for Tesla and SolarCity:
“Create a smoothly integrated and beautiful solar-roof-with-battery product that just works, empowering the individual as their own utility, and then scale that throughout the world. One ordering experience, one installation, one service contact, one phone app.”
Tesla’s Plan To Bail Out SolarCity
Tesla CEO and chairman, and CFO of SolarCity, Elon Musk has proposed combining the two companies to give consumers one-stop shopping for an electric car as well as the solar-powered electricity that will power it. Tesla and SolarCity shareholders will vote on the proposed merger between the two companies on November 17. Moreover, the merger has been fraught with corporate governance issues between the boards of both the companies.
SolarCity is projected to lose money for at least two more years. Moreover, it has been under intense scrutiny for the past few months. Six of seven directors on Tesla’s board have SolarCity ties. SolarCity’s CEO is Lyndon Rive, Elon Musk’s first cousin.
SolarCity has been trying to clear off a default on its debt. In its most recent quarterly filing, it was getting closer to violating bond covenants. The energy services company recently laid off 108 employees. Additionally, it scaled back guidance for growth for the year to 900 to 1,000 megawatts from 1,000 to 1,100 megawatts.
SolarCity is currently the biggest residential solar installer in the U.S. In 2014, it acquired solar module startup Silevo for $168 million. The acquisition gave SolarCity the factory in Buffalo where Panasonic will begin production for the cells and modules.