Tesla’s solar ambitions are in deep trouble according to reports. Solar cells designed to replace roofing shingles are reportedly not working out well for the company, with the majority of solar cells being exported overseas. The company is facing fresh scrutiny about its factory in Buffalo, New York, and the promises it made to the state to employ a certain number of workers at the facility.
A recent report from Reuters claims that the “great majority” of solar cells produced by electric car manufacturer Tesla in its upstate New York facility are being sold overseas instead of being installed as “Solar Roof” panels on homes across the U.S., as the company originally intended. The Reuters report claims that figures relating to the sale of Tesla’s solar panels reveal that the company’s purchase of SolarCity in 2016 for $2.6 billion may have been a bad move for Elon Musk’s car company.
The report from Reuters states:
Tesla has only sporadically purchased solar cells produced by its partner in the factory, Panasonic Corp, according to a Buffalo solar factory employee speaking on condition of anonymity. The rest are going largely to foreign buyers, according to a Panasonic letter to U.S. Customs officials reviewed by Reuters.
When the two firms announced the partnership in 2016, the companies said they would collaborate on cell and module production and Tesla would make a long-term commitment to buy the cells from Panasonic. Cells are components that convert the sun’s light into electricity; they are combined to make solar panels.
Tesla planned to use them in its Solar Roof, a system meant to look like normal roof tiles. Tesla Chief Executive Elon Musk billed the product as a cornerstone of the strategy behind the acquisition – selling a low-carbon lifestyle to eco-conscious consumers who could use the power from their Solar Roof to charge their Tesla electric vehicle.
But the company has installed them on just a handful of rooftops nationwide so far after production line troubles and a gutting of Tesla’s solar sales team.
Reuters notes that Tesla CEO Elon Musk previously referred to the purchase of Solar City as a “no brainer,” a move which he may now be regretting:
Tesla declined to comment on the company’s purchases of cells from Panasonic and would not provide figures for Solar Roof installations. But a company official said in an email “the number of solar roofs you cite in the story is low and unrepresentative as we are actively installing the Solar Roof in eight states currently.”
The situation raises new questions about the viability of cash-strapped Tesla’s solar business. Musk once called the deal a “no brainer” – but some investors panned it as a bailout of an affiliated firm at the expense of Tesla shareholders. Before the merger, Musk had served as chairman of SolarCity’s board of directors, and his cousin, Lyndon Rive, was the company’s CEO.
It also appears that Tesla’s relationship with Panasonic — which it shares a Buffalo, New York, production plant with — is no longer as close as it previously appeared to be. Additionally, the company is facing questions from the state about agreements it made to employ workers at the facility:
“We have two of the leading clean energy companies in the world in Buffalo at the RiverBend facility,” Pamm Lent, spokeswoman for Empire State Development, said in a statement. “Tesla produces their innovative solar roof tiles largely for development and testing with the goal of full scale launch in the future. Panasonic is now the largest producer and employer at RiverBend with a customer base independent of Tesla.”
Today, the companies operate separately at the Buffalo factory, according to one current and one former Panasonic employee.
“Everybody wants Tesla to succeed,” the employee said, “but we are operating completely independently from them right now.”
Read the full report from Reuters here.