Budding Tesla-Panasonic Romance is Western New York's Gain

Steph Willems
by Steph Willems

Sparks flew when Tesla teamed up with Panasonic to produce battery packs at the automaker’s Nevada Gigafactory. Of course, it helped that the Japanese battery maker brought $1.6 billion of its own money to the table.

After it tested the waters and liked what it saw, Tesla has now inked an agreement with Panasonic to bring jobs — hopefully long-lasting ones — to Buffalo, New York.

Both companies entered into a non-binding letter of intent yesterday, with the aim of producing solar cells and modules for SolarCity. Tesla has already signed a $2.6 billion deal to acquire the solar energy company, but shareholders have yet to give the deal the green light. The merger, and thus the new agreement, is due for a November 17 vote.

“Under this agreement…Tesla will use the cells and modules in a solar energy system that will work seamlessly with Powerwall and Powerpack, Tesla’s energy storage products,” the automaker stated in a blog post. “With the aid of installation, sales and financing capabilities from SolarCity, Tesla will bring an integrated sustainable energy solution to residential, commercial, and grid-scale customers.”

With shareholder consent, the two companies will push their beds together to make photovoltaic (PV) cells and modules at SolarCity’s South Park Avenue facility. Panasonic would provide the cells, while the merged Tesla-SolarCity entity would buy those components for the finished product. Production is scheduled to start next year.

According to The Buffalo News, the plant — billed as the largest solar panel factory in the Western Hemisphere — should employ 1,460 workers, with another 1,440 jobs created through suppliers and service contracts. While the jobs would be good news for Buffalo’s tax base, its residents have already ponied up a small sum for the plant’s creation. Solar City received $750 million in state tax dollars through the Buffalo Billion economic development initiative.

The two companies will show off a new product on October 28, The Buffalo News reports. A solar panel setup connected to a Powerwall 2.0 battery would give customers a way to wean themselves off the power grid.

Tesla CEO Elon Musk claims the two companies stand on solid financial ground. However, some investors weren’t pleased by news of the merger, saying SolarCity’s debt makes it a risky acquisition.

[Image: David Hamill/ Flickr ( CC BY-NC 2.0)]

Steph Willems
Steph Willems

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  • True_Blue True_Blue on Oct 18, 2016

    If this happens. There's been a rash of "maybes" - Bass Pro comes to mind - that sours my expectations. But, yes, it would be outstanding. The big FedEx expansion next to the Ford stamping plant, the data centers, and this would be a nice cherry on top.

  • Chuckrs Chuckrs on Oct 18, 2016

    City Journal (free online) has some background on the funding - the Buffalo Billion. Let's just say that it stinks to high heaven. US DA Preet Bharara will never run out of federal corruption investigations. The big fish are to be found in Albany and New York, not Buffalo. Buffalo has a history in technology so I don't think they will have a problem attracting talent as long as said talent really likes skiing and hockey. Bell Aircraft developed the X-1, Yeager's plane, as well as in many of the successors but is now only a memory. Textron Bell Helicopter has long since decamped to the warmer climes of Ft. Worth.

  • MaintenanceCosts Nope. The CUV is now the default car, and the sedan is a specialty product. For baseline competitiveness the OEMs need a full lineup of CUVs. Full-line OEMs also need pickup trucks and a couple sizes of SUVs. Sedans are what coupes used to be: a bonus afterthought.
  • Jeff I believe if they made sedans with usable trunks, taller, and easier to get in and out of more people would buy them. The trend toward sloped roofs, lower profiles, and small trunks has increased sales of crossovers and suvs.
  • KOKing Toyota still moved half a million Camrys and Corollas in the US last year, and although I can't find Model 3 numbers on their own, I'm guessing it's in the 200k range, so sedans aren't going the way of the PLC. Clearly SUVs and trucks have higher margins, and it's all about 'shareholder value' for the Big 3 in particular, so I don't seem them bringing em back if/until the pendulum swings back in another generation or two.
  • Billccm I miss the Fusion, too. My daughter's 2007 Fusion has been reasonably reliable and now approaching 200,000 miles her only replacement to consider is a Honda Accord. Sad Detroit decided not to compete in the automobile business.
  • Tassos Jong-iL Maybe I am wrong. I am paid to give me (as informed as possible) opinionDid you learn English in one of my gulag schools? I joke, I joke! please have a great weekend Healey-San.
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