Panasonic will stop making solar panels at Tesla’s New York factory as it pulls back from that market in the US, the company said Wednesday.
The Japanese electronics giant said it plans to leave the automaker’s so-called Gigafactory in Buffalo by September after halting US solar manufacturing operations by the end of May. The change will not affect Tesla’s operations at the plant, which produces panels for the company’s solar roof, according to Empire State Development, the state’s economic development agency.
Panasonic is severing solar ties with Tesla after reporting its first-ever quarterly profit at the Nevada factory where it makes batteries for Tesla’s electric cars. The two companies will continue their partnership there, Panasonic said.
“The decision to transition away from US solar manufacturing in Buffalo aligns with our global solar strategy, our efforts to optimize development and production, and supports Tesla’s long-term plans to continue and expand its operations,” Shinichiro Nakajima, director of Panasonic’s energy system strategic business, said in a statement.
Panasonic said it will give its affected Buffalo employees a severance package, but added that Tesla plans to hire some of them to support its solar operations there. Neither company immediately said how many of those workers Tesla will hire. Panasonic has about 380 employees at the plant, a source with knowledge of the situation said.
Panasonic’s withdrawal from Buffalo follows scrutiny of the factory that New York spent close to $1 billion to develop for SolarCity, the solar energy company Tesla acquired in 2016.
State Comptroller Thomas DiNapoli was auditing the project amid concerns about the slow pace of hiring at the factory, where Tesla had pledged to create at least 1,460 jobs in exchange for economic incentives. The state also wrote down the value of the plant by about $884 million last year, records show.
But Tesla has told state officials that it now has more than 1,500 jobs in Buffalo and more than 300 others across New York, Empire State Development chair Howard Zemsky said, adding that the agency will verify the company’s data.
“We understand that Panasonic has made a corporate decision to move away from global solar products, but this action has no bearing on Tesla’s current operations nor its commitment to Buffalo and New York State,” Zemsky said in a Tuesday statement.
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