Most of the solar cells made at Tesla’s solar factory in Buffalo, New York, are being exported instead of being installed on U.S. homes as originally planned, as Tesla continues to struggle on the American solar market, Reuters reported on Wednesday, citing sources at the factory and documents it has reviewed.
Tesla entered the solar power business with the acquisition of SolarCity in 2016, sparking concern among investors and industry observers that it was stretching itself too thin.
Tesla said in late 2016 that it had finalized an agreement with Panasonic to begin manufacturing photovoltaic (PV) cells and modules at the Buffalo, NY, factory.
Originally, the solar cells from the Buffalo factory were intended for the ‘Solar Roof’ solution that Tesla is offering.
“As part of the agreement, Panasonic will cover required capital costs in Buffalo and Tesla is making a long-term purchase commitment from Panasonic,” Tesla said back in December 2016.
However, according to an employee at the Buffalo factory who spoke to Reuters, Tesla has sporadically bought solar cells from its partner Panasonic. Most of the cells manufactured at the U.S. site are being exported to foreign buyers, according to a letter from Panasonic to U.S. customs officials that Reuters has seen.
The number of Tesla’s Solar Roof system installations has not lived up to initial expectations, as 21 systems were connected in California, according to state data cited by Reuters. A few others have been installed in the northeast of the U.S., a former Tesla employee familiar with the matter told Reuters. The employee was laid off in personnel cuts earlier this year.
Tesla’s solar sales slumped by 36 percent quarterly and by 38 percent annually in Q1 2019, according to the company’s Q1 update.
Last month, Tesla was said to be cutting the prices of its solar panels by as much as 38 percent below the national average in a bid to regain ground in the solar market.