Reports: Panasonic, Tesla to scrap solar panels partnership

TOKYO (AP) — Japanese electronics maker Panasonic declined to comment on reports Wednesday that it is planning to end its partnership with Tesla to produce solar panels at a factory in New York state.

The Japanese business daily Nikkei and other media reported, citing unnamed sources, that Panasonic is preparing to withdraw from the solar cell partnership, though it would continue making batteries for Tesla's electric vehicles.

The company refused comment, and Tesla did not immediately respond to queries requesting comment.

The two companies' agreement to work on solar energy was announced in 2016. They were to collaborate on production of photovoltaic cells and modules at Panasonic’s facility in Buffalo, New York. Modules are groups of battery cells joined together.

The venture, dubbed Gigafactory 2, began making cells for Tesla's Solar Roof in 2017. Nikkei said Tesla is instead using Chinese-made solar panels, while Panasonic sells those produced in New York to homebuilders and other customers.

Panasonic is a major manufacturer of home appliances, such as washing machines and refrigerators, but its operations include services and products for businesses.

Tesla, based in Palo Alto, California, leads the world in electric vehicle sales. The Nikkei report said Tesla might announce a new use for the factory in Buffalo in April since it needs to keep the factory running because of local subsidies it received to build the plant.

Competition from cheaper Chinese manufacturing of solar components has posed a problem for Panasonic as it strives to reposition itself for future growth.