Tesla’s solar factory is exporting most of its cells – document

From Reuters

Ha Ha.  21 in California~ctm

Nichola Groom

  • (Reuters) – The “great majority” of solar cells being produced at Tesla Inc’s factory in upstate New York are being sold overseas instead of being used in the company’s trademark “Solar Roof” as originally intended, according to documents reviewed by Reuters.
  • FILE PHOTO: Flags fly over the Tesla Inc. Gigafactory 2, also known as RiverBend, a joint venture with Panasonic to produce solar panels and roof tiles in Buffalo, New York, U.S., August 2, 2018. REUTERS/Brendan McDermid/File Photo

    The exporting underscores the depth of Tesla’s troubles in the U.S. solar business, which the electric car maker entered in 2016 with its controversial $2.6 billion purchase of SolarCity.

    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.

    California state data shows 21 Solar Roof systems were connected by the state’s three investor-owned utilities as of Feb. 28. Only a few others were connected in the northeastern United States, according to a former Tesla employee with knowledge of the matter, who was laid off during staff cuts earlier this year and asked not to be named.

    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.

    Panasonic spokesman Alberto Canal declined to comment on the company’s sales to Tesla, but confirmed that Panasonic was seeking to use its Buffalo operations to fulfill demand for U.S.-made solar cells from foreign buyers.

    Panasonic had said in a filing with the U.S. Department of Commerce in October 2018 that foreign demand for U.S.-made solar cells had sprung up after the Trump Administration imposed tariffs on overseas-made panels in 2018.

    Panasonic also produces traditional solar panels at the Buffalo plant for Tesla, but has been selling many of them to other buyers since at least last year due to low demand from the California car company, Reuters reported in August 2018. Tesla last month reported a 36 percent slide in its overall solar sales in the first quarter, adding to previous big drops since the SolarCity acquisition.

    Since Tesla purchased SolarCity in the fourth quarter of 2016, installations have dropped more than 76 percent, according to company financial disclosures.

    After gutting its solar sales team and ending its retail relationship with Home Depot, Tesla last month announced a plan to counter the downward spiral by offering cut-rate prices on standardized rooftop systems and requiring would-be customers to order solar products online.

    Panasonic’s move to diversify its solar customers is the latest sign of the company falling out of step with its longtime partner. Panasonic is Tesla’s sole battery supplier for its electric car business, but Musk last month blamed Panasonic for EV production delays. He has also said Tesla was looking for more battery suppliers for its new Shanghai car factory.

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  • HT/Colin
  • 27 thoughts on “Tesla’s solar factory is exporting most of its cells – document

    1. Is Elon Musk doing anything that the traditional automobile manufacturers are not doing? Does he have some kind of secret sauce? I don’t think so.

      As far as I can tell, Tesla has no special advantage over the traditional manufacturers and is therefore doomed.

      • As Tesla doesn’t make any normal vehicles for which the demand is massive there is no cashflow to underpin the battery cars. Hence burning through the cash and having to go for re-financing.

      • Musk was counting on a higher level of automation to be his secret sauce, but the level of automation in the factories of carmakers is set by engineers who have spent their entire careers in the automation of production lines. By the time Musk figured out he was wrong, he was missing production targets.

        Even if Tesla had a lead in technology over its competition, which they probably don’t, everyone else would catch up before Tesla figured out how to do mass production. The idea that Tesla has a lead comes from Musk claiming that he can sell a car for $35K and still make a good margin. Nobody else claims that, but it’s almost certainly an untrue claim.

        Electric vehicles are not yet profitable at the mass-market price point. But Tesla has purchase commitments for something like $17B for batteries from Panasonic. And they have the fixed costs of a “gigafactory.” They can’t simply revert to making niche products.

      • Elon might have had an easier time of it if he had used traditional building techniques when he started building cars. However, his cars are years ahead of the competition. Until you have driven one for a week you have no idea how marvelous they are. As an indication, my Porsche that used to be driven every chance I got now sits quietly- unused.

        • Bruce I will take your Porsche if you are giving it away.

          I will take that old technology off your hands.

        • The idea that he has a technology lead comes from his claim that he can sell a $35,000 car at an acceptable margin but it looks like an untrue claim. I don’t know that he’s ahead of GM, or BMW, or others. He might not even be third. But if he did have a lead, it would evaporate long before he figures out mass production.

        • Elon, you don’t need to use fake names as nobody will be fooled by this.

          Speaking to the LA Times, David Friedman, who was acting head of the NHTSA in 2014 and is now vice president of advocacy for Consumer Reports, said he was “surprised the agency didn’t declare Autopilot defective after the [2016] Gainesville crash and seek a recall.”
          He also said that Tesla’s system was “too slow” to warn the driver to pay attention, unlike other systems that Consumer Reports has tested from GM. Recall, just days ago we wrote about the family of a killed Model X driver suing Tesla, claiming his “state-of-the-art” Tesla lacked safety features, such as an automatic emergency braking system, which the family pointed out was available on less expensive vehicles from other carmakers.

      • He could have saved a lot by using standard building lines when he started building cars. As to the actual cars, if you drove one for a week you would never go back to another car. They are that good at what they do. You do need a garage so you can plug it in when you are home.
        My Porsche that used to get driven every day now sits unused in the garage.

      • I do not see much difference. They do make a very nice product, but I see the difference mostly as marketing and company (and Musk) image. A lot of WUWT complaints about tax breaks and customer tax rebates, but in the grand scheme, probably not much difference there, either (we may just not hear as much about GM getting similar breaks, and we know their customers got the same tax rebates).

        Several high-price products without economy-line backbone is not typically a recipe for long term business development, but it does happen. And note, some are fine with keeping a business smaller, but with a few high-quality, high-price products. Hence the diversification into solar roofing, battery backups, etc., additional high-price items without massive sales potential. Marketing niche products and government sales will have to continue, I would think.

    2. I continue to wonder how long Tesla will survive. It doesn’t seem to me to have the attributes of a self-sufficient commercial business.

      In the UK the solar roof website, last time I looked, required a significant payment on ordering and a long lead time. Not something that instils confidence.

    3. Statistic of the day: More people have died installing solar panels on roofs than all the people who died from nuclear power accidents.

      Roofing is more dangerous than coal mining.

      • That right there is the “ladders vs. marijuana” argument. one is illegal, the other has killed far more people than the illegal one ever will, and folks have been using both for centuries to get high.
        Sorry, I couldn’t help myself… 🙂

      • I like how you unintentionally (or intentionally?) equated nuclear power accidents to coal mining in your conclusion statement.
        English is hard.
        I like the idea of the solar roof, but it’s just an idea.

        On a related note… Imagine a world of fewer power generation accidents, far fewer fatalities, and far fewer ridiculous demands for wind & solar because sustainable nuclear fission supplies more power than we need at rates “too cheap to meter” (and fewer are belching crap out of their miniature power plants being carried around in their vehicles). I want to live in such a world.

        • It really is amazing how long myths live. Especially when there are those with a financial incentive to keep them alive.
          In most cities, the air coming out of cars is cleaner than the air going in.

          • MarkW, what are you suggesting is a myth? If it is my quote of chairman Strauss, that is a bit tongue-in-cheek. I admit that I was not around when he said those words, but I have verified and studied the quote numerous times over the years. I share the vision of a nuclear powered future (fission or fusion) that is too cheap to meter, though we are far from it, hence my use of the words “imagine” and “vision”. I benefit from such a world, though the only financial savings would be at the meter.

            Your other point is confusing to me. If each car, out of a million or more in a small geographical area, emits particulate matter, how long until “the air coming out of cars is cleaner than the air going in”? As the saying goes, “No single raindrop believes it is to blame for the flood.” My point was, the car exhaust is dirty; and while we have made great strides to clean it up, it remains an issue. We reduce, but we multiply. Can you clarify / reference what you meant?

    4. So don’t have to worry about the comp. for unisolar panels! Sweet, thanks for buying em, Elon.

    5. California state data shows 21 Solar Roof systems were connected by the state’s three investor-owned utilities as of Feb. 28. Only a few others were connected in the northeastern United States, […]

      That’s ‘product demo’ numbers where a few freebie installations are scattered about to get people interested and to have a few places for prospective customers to go to see an actual installation

      I wonder how many sales have been made? I hope none of the buyers paid extra for an extended warranty and I hope the buyers at least got a bonus set of Ginsu knives with their purchase.

    6. An acquaintance is an engineer consulting on production lines for the big manufacturers.
      A few years ago he was under a confidentiality agreement with Tesla and could utter no details. But it was bad.
      Recently he can talk. There is an engineering group that buys new cars and takes them apart. Then sells the info to other big manufacturers. For big fees.
      As he calls it the “body shop” Tesla uses about nine times the pieces that a properly engineered line would use.
      Of course, when consulting he had the special ID.
      At receptions and parties the young ladies would almost worship him because of TESLA around his neck.
      He also used the term “enraptured” and if he wasn’t married …………..well.

    7. Production targets are consistently missed. The last two quarters of 2018 showed the first profits for years, obliterated by a massive loss in 2019Q1. Over one hundred of Tesla’s top execs have departed, not extraordinary in itself for that size of organisation, until you realise many have left a wealth of shares on the table. Then ask why a predominantly car producing company has a market capitalisation greater than GM or Ford, but delivered less than one sixth of the number of cars sold by GM in the twelve months to April ’19 making massive losses on the way. Hopefully they will continue to get some profit from delivering groceries to the space station. Tulip bulb, anyone?

    8. They are not even a flea on the back of solar industry elephant but in fact they are the second case of claiming to start the world’s largest solar factory building after nano solar claimed such a milestone with a building in San Jose years ago. Both cases involved hoodwinking governments that are easy marks for green con jobs.

    9. I note that the Tesla stock price at the close of business on 13 December 2018 was $376.79.
      At the close of business on 17 May 2019 it was $211.07.

      There appears to be a slight decline.

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