Tesla demand for Buffalo-made PV lower than expected - report
SolarCity van. Author: Tony Webster. License: Creative Commons, Attribution 2.0 Generic.
Japan’s Panasonic Corp (TYO:6752) remains committed to investing JPY 30 billion (USD 270m/EUR 238m) in the solar cell factory in Buffalo, New York even though demand from Tesla Inc (NASDAQ:TSLA) has been lower than previously expected, The Wall Street Journal (WSJ) reports.
At the end of 2016 the two companies unveiled a solar manufacturing partnership in Buffalo, which envisaged an investment by Panasonic and a long-term purchase commitment by Tesla. Details of the deal were scarce, but it was understood that the electric vehicle (EV) maker would buy the entire output for its solar business, previously known as SolarCity.
Panasonic has now announced, as cited by the WSJ, that it has been selling photovoltaic (PV) cells to other buyers, not just Tesla, as the terms of the agreement between the two have been revised early in 2018.
A Tesla spokesman was quoted as saying that the contract with Panasonic involved no exclusivity.
The Buffalo manufacturing plant was originally a project of SolarCity, acquired by Tesla in November 2016. In less than two years the solar business has shrunk significantly. Volumes fell from 836 MW in 2016 to 522 MW in 2017, according to an analysis by Ohm Analytics. Most of the decline came as the company reduced its sales and marketing spend and moved away from a door-to-door sales model.
In June Reuters reported that the company is closing over a dozen installation offices of its solar unit, including in top solar states like California, Arizona and New Jersey. It also ended its residential solar and battery sales agreement with Home Depot Inc (NYSE:HD) as part of a restructuring.
Tesla reported solar system deployments of 76 MW in the first and 84 MW in the second quarter of 2018.