Tesla (NASDAQ:TSLA) and Panasonic have revealed that they will be working together to make new solar modules and cells at Buffalo in New York. The two businesses will make photovoltaic components at the factory. It was also learned that production is going to start at the SolarCity factory next year.
The deal was announced on Sunday night by Tesla in a blog post. Panasonic Corporation (TYO:6752) later confirmed that they have signed the agreement.
This is going to be an extension of a working partnership, as the Elon Musk-led business is working with Panasonic of Japan already to make car batteries.
Work on Tesla’s Energy Storage Products
The modules and cells made at the Buffalo plant will be used with the company’s energy storage products, Powerpack and Powerwall.
J.B. Straubel, the co-founder and Chief Technical Officer of Tesla, said, “By working together on solar, we will be able to accelerate production of high-efficiency, extremely reliable solar cells, and modules at the best cost”.
The Tie to Help Both Tesla and Panasonic
The partnership is good news for the Japanese manufacturer, as Panasonic in recent years, has moved away from consumer electronics. The business is now focusing on car batteries, automobile information systems, and housing.
It will also help Musk push for a merger of the two businesses, his Tesla Motors, and SolarCity, where Musk has 20 percent ownership. Last August, Tesla announced that they want to purchase SolarCity. Shareholders of the two businesses are expected to vote next month to pass this acquisition.
He feels that if the two businesses come together, then they will be able to offer a single store for the electric cars and solar-powered electricity, which will power these cars. However, there are corporate governance issues involved with the merger, as the two businesses are intertwined. Musk is the Chairman and chief financier of SolarCity, and his cousin, Lyndon Rive, is the Chief Executive.
Some analysts are also unhappy with this new partnership, as in recent months, SolarCity has been burning a lot of their cash reserves. SolarCity is likely to lose money for at least two more years and has been under scrutiny.
The Panasonic-Tesla deal will work only if the shareholders agree that Tesla will acquire SolarCity. The Panasonic stock was up 2.05 percent in Tokyo on Monday. The Tesla (NASDAQ:TSLA) stock, however, climbed down by more than 2 percent.