Tesla’s partnership with Panasonic for the batteries in their Model 3 was a match made in heaven. Working together in the Gigafactory allowed Tesla to make its production much more efficient. But it seems like their partnership in producing solar cells has not gone as well. According to a report by Nikkea, Panasonic is backing out of the deal. Could this lead to trouble on the horizon for Tesla?
It seems like this partnership just wasn’t a great fit. Tesla built this factory to build its solar roof tiles, and Panasonic’s solar cells couldn’t achieve the look they were going for.
Over time Tesla shifted to using Chinese made solar cells, which have been far cheaper. Without Tesla buying their solar cells Panasonic had to sell the cells made in Gigafactory 2 to other clients, like Japanese homebuilders.
While these cells couldn’t achieve the look Tesla was going for, I think the big problem here was the price. Cheap Chinese competition has pushed Panasonic’s solar division into the red, and it seems they want out. With them selling off another key solar plant it doesn’t look like Panasonic wants to compete in solar any longer.
Currently, the companies plan to continue working together on producing automotive batteries. But this strained relationship might be on its last leg. Panasonic is nowhere to be found in the Shanghai Gigafactory, with Tesla opting for cheaper LFP batteries from CATL.
Tesla may begin looking to find a new partner for Gigafactory 1 soon. But this partnership was never meant to last, as they’ve been trying to develop the means to produce their own battery cells. This move might push Tesla to work even harder to lessen its dependence on battery suppliers.
The big question is what’s going to happen to Gigafactory 2? The factory was built with local subsidies, so production must continue. We should find out what they choose to do at a company talk at the factory in April.
There are rumors of batteries being produced at Gigafactory 2, but I find this highly unlikely. Tesla is pushing their solar options hard this year. They’re hiring people across the country for Solar Roof installation. If they really do want to increase solar production buying cells overseas might hurt them.
So while we don’t know much yet about Tesla’s future plans, I don’t think ending this partnership will hurt them. Tesla’s solar options are already a fairly small portion of the company, and they weren’t buying the solar cells Panasonic was making to begin with.
If anything freeing up space in this factory gives them tons of options to choose from moving forward. If they’re able to find a good partner for solar cells Tesla could massively increase solar production over the next few years. And while I’d be surprised to see it, producing batteries at the factories could also be a massive boon to Tesla. With such high demand for the Cybertruck Tesla could use all the batteries they can get.
I’m very excited about this company event in April. I can’t wait to find out what they decide to do with Gigafactory 2, as it could have a great effect on the company moving forward. So follow our social media up top and we’ll keep you updated with all the new developments around Tesla!