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.

  • Kjhkjlhkjhkljh kljhjkhjklhkjh A prelude is a bad idea. There is already Acura with all the weird sport trims. This will not make back it's R&D money.
  • Analoggrotto I don't see a red car here, how blazing stupid are you people?
  • Redapple2 Love the wheels
  • Redapple2 Good luck to them. They used to make great cars. 510. 240Z, Sentra SE-R. Maxima. Frontier.
  • Joe65688619 Under Ghosn they went through the same short-term bottom-line thinking that GM did in the 80s/90s, and they have not recovered say, to their heyday in the 50s and 60s in terms of market share and innovation. Poor design decisions (a CVT in their front-wheel drive "4-Door Sports Car", model overlap in a poorly performing segment (they never needed the Altima AND the Maxima...what they needed was one vehicle with different drivetrain, including hybrid, to compete with the Accord/Camry, and decontenting their vehicles: My 2012 QX56 (I know, not a Nissan, but the same holds for the Armada) had power rear windows in the cargo area that could vent, a glass hatch on the back door that could be opened separate from the whole liftgate (in such a tall vehicle, kinda essential if you have it in a garage and want to load the trunk without having to open the garage door to make room for the lift gate), a nice driver's side folding armrest, and a few other quality-of-life details absent from my 2018 QX80. In a competitive market this attention to detai is can be the differentiator that sell cars. Now they are caught in the middle of the market, competing more with Hyundai and Kia and selling discounted vehicles near the same price points, but losing money on them. They invested also invested a lot in niche platforms. The Leaf was one of the first full EVs, but never really evolved. They misjudged the market - luxury EVs are selling, small budget models not so much. Variable compression engines offering little in terms of real-world power or tech, let a lot of complexity that is leading to higher failure rates. Aside from the Z and GT-R (low volume models), not much forced induction (whether your a fan or not, look at what Honda did with the CR-V and Acura RDX - same chassis, slap a turbo on it, make it nicer inside, and now you can sell it as a semi-premium brand with higher markup). That said, I do believe they retain the technical and engineering capability to do far better. About time management realized they need to make smarter investments and understand their markets better.
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