The source is, as will become apparent, rather pro-Tesla but this is probably the fairest interpretation of the story first reported by the Buffalo Business Journal and then a couple days later by the WSJ.
Personally I think SolarCity will be out of business this time next year.
From1RedDrop, August 17:
A WSJ article earlier this week cited Panasonic as saying that “Tesla has backed away from an agreement to buy all of the output from a solar-panel factory it operates with Panasonic Corp.” While this sounds like Tesla violated an agreement, Tesla says otherwise.
According to a Tesla spokesperson: “We continue to use cells and solar modules produced in Buffalo by Panasonic…in line with our contract, which contains no requirement of exclusivity. We anticipate using the full production capacity of Gigafactory 2 over time as we reach higher output and installation volumes.”
Tesla has been having problems on the installation front for its solar panels, and the fact that its hard to get Musk’s approval on the esthetics aspect of any product means that only one type of panel is now being installed – textured black. That and other issues have created a slowdown in installations, and this has created a slowdown in component acquisition from its partner, Panasonic.
In an earlier report, we mentioned that Panasonic had not signed any agreements with third parties for its solar components. But the deal terms were revised earlier this year, and the company is now reportedly selling panels under its own brand as well as to other companies.
As it turns out, this may not be a bad thing. Panasonic is facing a slowdown in demand back in Japan for its panels, and that’s related to subsidies getting cut and overall solar panel demand softening in the land of the rising sun. The altered deal with Tesla now puts pressure on Panasonic to boost U.S. sales, but the Trump-initiated tariff increases on Chinese panels could be a way out of this predicament. Panasonic says that demand in the U.S. for domestic-made panels was “intact.”
Tesla’s (and Musk’s) focus of late has been on ramping up production of the Model 3 electric car.See also yesterday's "Jim Chanos Has Some Thoughts On Tesla (TSLA)".
While it’s possible that this has affected the SolarCity side of the business that operates in the Buffalo factory dubbed Gigafactory 2, it appears to be a short-term problem. For its part, Tesla is still committed to buying up Panasonic’s full production at Gigafactory 2 once installation volumes are back up. Meanwhile, Panasonic’s plans to invest $271 million in the facility remain unchanged.
The relationship between the two companies goes as far back as 2010 when Panasonic first started providing batteries for Tesla EVs. That relationship later matured into a joint investment deal for Gigafactory 1 in Nevada, where Panasonic is even now open to increasing its investments if Tesla requires....MORE
