Tesla Motors Inc (NASDAQ:TSLA) has agreed to partner with Panasonic on the production photovoltaic cells and modules that are to be used on a solar energy system currently in use in Powerwall and Powerpack storage devices. The new deal builds on a similar agreement signed for the development of batteries at the Gigafactory in Nevada.
Terms of the Deal
While the agreement is a big deal for Tesla, which is looking to diversify its areas of operation, it still faces an uncertain future. The agreement will only come into effect on shareholder approving the proposed $2.6 billion acquisition of SolarCity. A vote on the proposed merger is slated for the 17th November.
Making public the Panasonic agreement does not come as a surprise given that chief executive officer Elon Musk is aggressively looking to change investor’s perception on the merger. Skeptics have so far shrugged off the need to acquire SolarCity Corp (NASDAQ:SCTY) arguing that such a move would only eat into the EV giant finances given that it is yet to generate any profits.
Tesla-Panasonic Growing Ties
In a statement, Tesla has confirmed it plans to secure a long-term purchase commitment for the Photovoltaic cells and modules from Panasonic on shareholders approving the SolarCity merger. Production of the photovoltaic cells in questions should begin in 2017 at SolarCity’s factory in Buffalo New York.
“We expect that the collaboration talks will lead to growth of the Tesla and Panasonic relationship,” said Shuuji Okayama, vice president of Panasonic’s Eco Solutions unit, in a statement.
The agreement is also a big coup for Panasonic, which is aggressively looking for ways to diversify its areas of operations away from the consumer electronics market.
Panasonic has in the recent years emerged as Tesla’s key industrial partner as both company’s continue to bet big in the solar storage business through batteries. The Japanese company currently supplies the EV giant with lithium ion cells used in Model S and Model X.
Tesla stock closed Friday trading at $196.51 a share having shed 1.86%.