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Tesla Finds Itself Supplying… Its Own Competitors?

In case you did not realize it, Tesla makes more than electric cars– for example, they also manufacture and install solar roofs.  But in an odd twist of fate, it seems like their current production of solar cells is actually benefiting their competitors more than themselves.  Why would Tesla export solar cells to other companies?

SolarCity Purchase

Back in 2016, Tesla made the controversial purchase of the solar panel manufacturing company SolarCity for $2.6 billion.  The acquisition was controversial since Tesla CEO Elon Musk had previously sat on the board, and his cousin was the CEO, so many viewed the purchase as a conflict of interest.  Whether or not that was true, things have not been going well for Tesla since then.  According to company financial disclosures, installations of Tesla’s Solar Roofs have declined by 36 percent in overall sales in Q1 of this year, and more than 76 percent since the acquisition. 

As a result, Tesla has gutted its solar sales team.  A retail partnership with Home Depot for their Solar Roofs has also has ended.  Now customers are only able to purchase Tesla’s solar products online.

Tesla Factory Exporting Panasonic Solar Cells

The Gigafactory II in Buffalo, New York, is a joint partnership with Panasonic, the sole manufacturer of its electric car batteries as well as solar cells for its Solar Roofs.  Panasonic put a lot of money into the factory with the intention of producing solar cells for Tesla to purchase for its Solar Roofs.  Unfortunately, it seems like the two companies are now operating separately within the facility, as anonymous employees have reported that the Gigafactory II now primarily serves as a place to manufacture solar cells for other buyers. These buyers are essentially competitors for Tesla as it exports solar cells to them.

Thanks to tariffs set in place by Trump on overseas-manufactured cells in 2018, the demand for U.S.-made solar cells has risen exponentially among foreign buyers.  As long as foreign-made solar panels contain U.S. cells, they can avoid having to pay tariffs when importing.  It is rumored that Panasonic’s current biggest customer is a large Asian-based company.

With little interest in Tesla’s Solar Roofs, it seems only natural that Panasonic would need to branch out to find other customers so that their presence there could remain profitable. 

Business Partnership Strained?

All of this could be a sign that the relationship between Tesla and Panasonic is growing strained.  Last month Elon Musk blamed production delays on Panasonic, making it sound as though they were not providing Tesla with batteries in a timely manner.  He also implied that Tesla would be searching for alternative battery suppliers at its new Shanghai factory. 

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