SAN, FRANCISCO/TOKYO – Tesla Motors Inc. and Panasonic Corp. completed work on an agreement to begin manufacturing solar cells and modules at Tesla’s factory in Buffalo, New York, eventually bringing some 1,400 jobs to the region.
Production will begin this summer, with the factory’s output capacity expanding to 1 gigawatt by 2019, the companies said in a statement Tuesday. Panasonic will invest more than ¥30 billion ($256 million) for the installation of production equipment, said Yayoi Watanabe, a spokeswoman for the Osaka-based company. The total investment wasn’t disclosed in the statement.
Among the jobs being created are more than 500 manufacturing positions. Palo Alto, California-based Tesla is expanding its manufacturing base in the U.S. and CEO Elon Musk is on President-elect Donald Trump’s business advisory team.
“We already knew about this deal, but now it’s finalized,” said Ben Kallo, an analyst with Robert W. Baird. “Panasonic is covering the capital costs, and Tesla is buying the modules. You’re seeing the stock break out a bit.”
Tesla shares rose 3 percent to $219.84 at 1:09 p.m. New York time and have declined about 8.2 percent this year.
The announcement underscores deepening ties between Tesla and Panasonic. The companies are building a $5 billion lithium-ion “Gigafactory” east of Reno, Nevada, to produce batteries for both electric cars and energy storage products. In October, Tesla revealed plans to work with Panasonic to make solar cells and modules. Tesla acquired solar installer SolarCity for $2 billion. Musk revealed plans for a new solar-roof made of glass tiles in late October.
“When production of the solar roof begins, Tesla will also incorporate Panasonic’s cells into the many kinds of solar glass tile roofs that Tesla will be manufacturing,” Tesla said in a blog post.
Tesla has several products in its pipeline. Besides the solar roof, there is enormous anticipation around the Model 3, a more affordable electric sedan that is expected to launch in late 2017. Tesla is also working on a semi truck and a transit bus.