Tesla and Japan’s Panasonic will end their partnership for producing solar cells after years of struggling to ramp up output at the Gigafactory 2 in upstate New York, The Nikkei business daily reported.
Panasonic will retain its automotive battery joint venture with the U.S. electric vehicle maker in the U.S. state of Nevada, which reported its first quarterly profit after years of production troubles and delays, Reuters reported.
Tesla’s 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.
Low demand from Tesla left Panasonic sending most cells from the plant to overseas clients, instead of selling them to Tesla for its trademark Solar Roof – cells designed to look like regular black roof tiles – as initially intended.
When announcing the solar partnership with Tesla in 2016, Panasonic said it would invest more than 30 billion yen ($272 million) in the plant in the U.S. city of Buffalo. Tesla’s long-term purchase commitment from Panasonic was part of the deal.
Panasonic has shrunk its own solar business elsewhere as it contends with competition from cheaper Asian rivals, selling its solar panel plant in Malaysia and research arm to China’s GS-Solar for an undisclosed amount last year.