Tesla is adding new products in Buffalo as its solar business slumps – Buffalo News

Tesla is adding new products in Buffalo as its solar business slumps - Buffalo News
Exclusive: Teslas solar factory is exporting most of its cells – document
Tesla is broadening the products it makes at its Buffalo factory beyond solar panels to include electrical components for its batteries and its electric vehicle charging stations.

The new products are a way of bringing more work and a more diverse product line to the Buffalo factory at a time when Teslas solar energy business is slumping. The company is less than a year away from a requirement that it essentially double the size of its current workforce or else face a $41.2 million penalty from the state, which built the factory with $750 million in taxpayer funds.

At the time, it planned to use the factory to make a trailblazing product called the Solar Roof, an energy system meant to look like normal roof tiles. But that product has been far slower to reach the market than promised, and Panasonic is shipping most of the cells originally intended for the Solar Roof to customers overseas. Panasonic has also sought other customers for its Buffalo-made panels.

Tesla said it has started making electrical components for the latest version of its electric vehicle Supercharger in Buffalo. The first production line for the Supercharger cabinet is operational, with additional lines scheduled to be installed later this year.

Tesla employs 329 workers at the factory and about 300 others elsewhere in the state, the report said. It was required to have at least 500 employees in the state by April 30 of this year in exchange for $750 million in subsidies for the Buffalo facility, which is known as the RiverBend factory.

The company also has added several production lines to support making other electrical components that are used in its Powerwall and Powerpack batteries.

Teslas manufacturing partner, Panasonic Corp, has about 400 employees at the Buffalo plant. It was not immediately clear whether those jobs are included in the count toward meeting the state targets. Panasonic manufactures solar cells and assembles panels at the factory for Tesla and others.

Teslas New York solar factory making other products in bid to boost jobs

“This expanded and diversified product manufacturing further brings the Riverbend facility into the full ecosystem of solar, energy storage, electric vehicle and other Tesla product offerings,” said Jonathan Chang, the assistant secretary at Teslas Silevo subsidiary, in a letter to state officials.

A Tesla spokeswoman declined to elaborate on the scope of the new operations or the number of employees involved in the production of the new products.

The disclosure came as Tesla filed a required report with the state showing that the Buffalo factory had 730 full-time employees at the end of April between Tesla and its partner, Panasonic, which makes solar panels and modules in its portion of the facility. Another 43 people work at the facility as contingent workers, contractors and vendors.

The company disclosed the move in an annual report to New York state in which it said it had exceeded its jobs and investment commitments thus far. But the company must add hundreds more workers in New York to meet next years target.

Among those 730 employees, Tesla said it had 329 full-time workers, while Panasonic employed 401, according to the report.

Teslas plan to manufacture solar products in New York has come under scrutiny as the company drastically scaled back the U.S. solar business it acquired in 2016 with the $2.6 billion purchase of SolarCity.

“In addition to scaling production of Solar Roof, Tesla is also diversifying its presence in Buffalo by manufacturing and assembling Supercharger and energy storage components at Gigafactory 2,” a Tesla spokeswoman said in a statement. “Were committed to investing in Buffalo and the state, and the new power electronic lines will deliver more high tech jobs while supporting Teslas energy storage products and global Supercharging infrastructure.”

Tesla Inc. said on Wednesday its solar factory in Buffalo, N.Y., would become the “manufacturing home” for its electric vehicle Supercharger cabinets and other energy storage products as it seeks to meet employment targets tied to state subsidies linked to the site.

Teslas employment in Buffalo easily topped its target of bringing 500 jobs here by the end of April. But Tesla will have a much harder task meeting its next employment goal, which will require it to roughly double its employment to 1,460 people between itself and Panasonic by the end of April 2020.

Teslas New York Jobs Target On Track as Buffalo Factory Expands Beyond Solar

“We are pleased that Tesla is reporting that it has exceeded its job and investment commitments, invested $381 million over the course of the project, and become host to nearly 800 full-time employees working at the manufacturing facility,” said Pamm Lent, an Empire Development Corp. spokeswoman. “In the coming weeks, ESD will perform the necessary due diligence to verify the data provided by Tesla.

“We’re committed to investing in Buffalo and the State, and the new power electronic lines will deliver more high tech jobs while supporting Tesla’s energy storage products and global Supercharging infrastructure,” Tesla said in an emailed statement.

Doubling the Riverbend factorys employment will be a big challenge at a time when Teslas solar energy business is shrinking – not growing – and the solar roof product that the company expects to account for much of Teslas production in Buffalo is still being developed and tested.

At the time, it planned to use the factory to make a trailblazing product called the Solar Roof, an energy system meant to look like normal roof tiles. But that product has been far slower to reach the market than promised.

Teslas first-quarter solar installations plunged by 38 percent from a year ago and are at their lowest level in more than five years. Not once since the fall of 2013 had Tesla – or SolarCity before it – installed less than 73 megawatts of solar generating capacity during a single quarter. In the first quarter of this year, it installed just 47 megawatts – less than a third of what it did during the same period just two years ago.

Teslas plan to manufacture solar products in New York has come under scrutiny as the company has drastically scaled back the U.S. solar business it acquired in 2016 with the $2.6 billion purchase of SolarCity.

That puts Tesla on pace for less than 200 megawatts of solar installations this year – just a fraction of the 1,000-megawatt production capacity of the Buffalo factory. In response, Tesla late last month said it was slashing the price of its residential rooftop solar systems in a bid to increase sales, while also limiting the sizes of its solar arrays to standardized increments and pushing customers to order online as a way of reducing costs.

Tesla will also open three new vehicle service centers in New York, the company said. A year from now, the company is required to employ 1,460 workers in the state.

With Teslas solar energy business shrinking, Panasonic has been selling “the great majority” of the solar cells it makes in Buffalo to foreign buyers as a way of avoiding U.S. tariffs on imported solar panels, Reuters reported Wednesday.

The company disclosed the move in an annual report to New York state in which it said it had exceeded its jobs and investment commitments thus far.

Since buying SolarCity in November 2016, Tesla gutted the solar business sales staff. It dropped door-to-door sales, stopped selling through Home Depot stores and is pushing customers to make solar energy system purchases online as it shrinks its store network.

Teile parema üldkogemuse pakkumiseks soovime näidata asjakohaseid reklaame, mis on teile kasulikumad. Näiteks kui otsite mõnd filmi, kasutame teie otsinguteavet ja asukohta, et näidata teile lähedal asuvaid kinosid. Samuti kasutame seda teavet, et näidata teile reklaame sarnaste filmide kohta, mis võivad teile tulevikus meeldima hakata. Sarnaselt Oathile võivad ka meie partnerid teile näidata reklaame, mis võivad nende arvates teile huvi pakkuda.

Tesla also said it plans to open electric vehicle service centers in Buffalo, Rochester and Albany. The company has over 39 Superchargers and more than 1,500 of its Level 2 vehicle charging stations in New York.

Autoblog on nüüd teenuse Oathi pere osa. Meie (Oath) ja meie partnerid vajavad teie seadmele juurdepääsu saamiseks, küpsiste salvestamiseks ja andmete (sh asukohateabe) kasutamiseks teie nõusolekut, et mõista teie huve, näidata asjakohaseid reklaame ning mõõta nende tõhusust. Oath näitab teile ka asjakohaseid reklaame meie partnerite toodete kohta. Lisateave

Tesla said its total investment in its New York operations was nearly $382 million by the end of April, more than double the $179.3 million required by its deal with state officials. Tesla also is within $90 million of its total investment target of $472 million by the end of April 2020. That investment includes payroll, benefits, inventory, capital spending and other expenses.

Valige OK, et lubada Oathil ja meie partneritel kasutada teie andmeid, või Valikute haldamine, et vaadata üle meie partnerid ning teie valikud. Näpunäide: Logi sisse nende valikute salvestamiseks ja selle kordamise vältimiseks teistes seadmetes. Saate oma eelistusi alati muuta valikus Privaatsuskeskus.

Gigafactory 2 exports suggest Teslas Solar Roof business is in trouble

Teslas 2016 acquisition of SolarCity is looking worse and worse. And its $1 billion solar gigafactory in Buffalo, New York, which the state built, subsidized, and equipped for SolarCity, seems to be primarily operating as a Panasonic plant.

Lugege lähemalt selle kohta, kuidas Oath kogub ja kasutab andmeid ja kuidas meie partnerid koguvad ja kasutavad andmeid.

The news: The overwhelming majority of the solar cells produced at the facility are now being sold overseas rather than being used in Teslas Solar Roof photovoltaic product, according to a Reuters report on Wednesday, citing a letter to US customs officials from Panasonic, Teslas partner on the plant.

That product was designed to resemble rooftop shingles with solar cells embedded inside, an effort to differentiate the offering in the commodity solar panel business. But the line appears to have been a flop. Californias utilities have connected only 21 such systems, according to state data obtained by the news service. And just a few were installed in the Northeast, Reuters reported, citing an anonymous former employee.

In the more than two years since Tesla acquired SolarCity, its overall solar installations have plummeted by more than 76%.

Panasonic produces the solar panels at the Buffalo plant for Tesla, but Reuters said it has been selling many of them to other buyers since last year due to low demand from the California automaker. 

A Tesla spokesperson told Reuters its actively installing the Solar Roof product in eight states but declined to discuss its purchases from Panasonic or provide overall installation numbers.

The two firms announced a partnership in 2016 and said they would collaborate on cell and module production. Tesla made a long-term commitment to buy the cells from Panasonic. 

The background: Tesla bought SolarCity for $2.6 billion in late 2016, in a deal that was heavily criticized because of SolarCitys huge debt load and Tesla chief executive Elon Musks connections to the company. He had been the chairman of SolarCity and is a cousin of the cofounders, Peter and Lyndon Rive, both of whom have since left.

Soon after, Tesla unveiled the Solar Roof line, a marked shift from the business model of SolarCity, which primarily sold and installed rooftop solar panels produced by Chinese manufacturers. Tesla also struck a deal to buy custom solar cells for its products from Panasonic, which in turn agreed to invested $250 million into the gigafactory and set up its own production line there.

Tesla has only sporadically purchased solar cells produced by its partner Panasonic Corporation (OTC: PCRFY), Reuters said in the Wednesday story.

The subcontract also provided a way to help Tesla achieve hiring commitments required as part of the states $750 million in subsidies. But it still appears likely to fall short of the nearly 1,500 employees required by 2020, which would trigger financial penalties and has already prompted sharp criticisms of the deal by some state legislators.

This is a new market that arose after the Trump administration imposed tariffs on overseas-made panels in 2018, according to Reuters. 

Solar struggles: Tesla has been struggling to get production up and running, and gain ground in a solar space dominated by low-cost panels produced overseas, primarily in China.

Last year, Tesla ended its months-old retail partnership with Home Depot, and shuttered a number of solar installation facilities. It's reportedly cut thousands of workers in its solar division since the acquisition. The team also faced difficulties with the appearance and performance of the Solar Roof tiles.

A Bloomberg article late last year said Tesla was operating just one production line at the Buffalo factory, rather than the multiple lines that were supposed to be running at that stage.

The piece also noted that Panasonics production is distinct from Tesla, set up on the other side of the building, despite Teslas portrayal of the deal as a close collaboration. While Panasonic has been making Solar Roof cells, Tesla took issue with their aesthetics and cost and had turned to a Chinese supplier as well, Bloomberg reported, citing several sources.

Its unclear precisely how many solar cells, roof tiles, or panels Tesla is now producing itself or acquiring from Panasonic. But it's likely a small fraction of the one gigawatt of solar capacity a year that the company initially boasted the factory would produce (see 10 Breakthrough Technologies 2016: SolarCitys Gigafactory).

James TempleI am the senior editor for energy at MIT Technology Review. Im focused on renewable energy and the use of technology to combat climate change. Previously, I was a senior director at the Verge, deputy managing editor at Recode, and columnist at the San Francisco Chronicle. When Im not writing about energy and climate change, Im often hiking with my dog or shooting video of California landscapes.

ShareLinkAuthorJames TempleI am the senior editor for energy at MIT Technology Review. Im focused on renewable energy and the use of technology to combat climate change. Previously, I was a senior director at the Verge, deputy managing editor at Recode, and columnist at the San Francisco Chronicle. When Im not writing about energy and climate change, Im often hiking with my dog or shooting video of California landscapes.


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