Factory output hard to increase, Tesla Panasonic abandons solar cell partnership

Panasonic’s lithium-ion battery business is doing better and better as Tesla sells around the world. Panasonic was a long-term lithium battery production partner for Tesla and was the only lithium battery supplier to Tesla’s U.S. electric car plant. Over the past year, however, Panasonic’s relationship with Tesla has cooled.

Factory output hard to increase, Tesla Panasonic abandons solar cell partnership

February 26 (UPI) — The two companies will abandon their partnership to produce solar cells as production at Tesla’s Gigafactory 2 plant in La Buffalo, upstate New York, is struggling to increase production,media reported.

It is understood the two companies plan to continue working together on the batteries of Tesla’s electric cars, but the decision could have a negative impact on their cooperation.

Back in 2016, Tesla and Panasonic announced their cooperation in solar cell production. Panasonic covered some of the equipment costs of the Gigafactory 2 plant. However, Panasonic’s solar cells are also used in Japan and supplied to other suppliers.

In 2017, the core components of Tesla’s solar panels will begin production at the Gigafactory 2 plant. Initially, Panasonic’s batteries should be used on Tesla’s solar roof. But Panasonic’s batteries don’t meet Tesla’s cost and efficiency requirements.

In 2019, Tesla unveiled a third-generation solar roof, which uses Chinese-made batteries, and the price of the entire system has plummeted by 40 percent by optimizing the product and installing the process faster.

Production at Tesla’s Gigafactory 2 plant in Buffalo fell further as its solar roof used cheaper Chinese batteries. So Panasonic intends to cut costs by shutting down idle production line capacity and abandon its partnership with Tesla to produce solar cells.

On top of that, the two are moving further along with Tesla’s electric car batteries. Although Panasonic is still producing lithium batteries for Tesla’s Fremont, California plant.

But Panasonic also announced it would not increase capacity at its lithium-ion battery plant in Reno, Nevada, which it co-operates with, largely because of insufficient demand for electric cars. It also said it would not build a new battery plant in China for Tesla’s Shanghai plant.

Tesla, on the other hand, has increased its battery supply by expanding its circle of friends. In order to meet the lithium battery needs of the Shanghai plant, Tesla has signed agreements with South Korea’s LG Chemical and Ningde Times to become lithium battery suppliers at the Shanghai plant.