After $750 million in subsidies and years of delays, critics say Elon Musk hasn’t done enough for his solar panel factory
Just south of downtown Buffalo, near abandoned factories and crumbling brick warehouses, is a 1.2 million-square-foot white box housing Tesla Inc.’s solar panel factory. The state of New York paid $750 million to fund this place, based on a commitment to create almost 1,500 jobs here. On a Tuesday morning in mid-November, two dozen of these workers monitor several rows of robots working on the Solar Roof, a new kind of solar panel that Tesla Chief Executive Officer Elon Musk is very excited about. Or was, anyway.
A Solar Roof is made of textured glass tiles with solar cells hidden inside. On the factory line in Buffalo, these shingles slide on a conveyor belt toward a gigantic laminator, where components are heated and vacuumed together into a single module, a “solar sandwich,” as employees call it.
“By the time we’re done, this factory will not have much floor space,” says Sanjay Shah, who oversees solar for Musk from the company’s Bay Area offices. Wearing protective rubber shoes and a constant smile, Shah rebuts criticism that Tesla’s entrance into the solar business has been a boondoggle.
Tesla has presented the Buffalo operation as a sequel to the Gigafactory, its enormous battery plant near Reno, Nev. But where that factory employs more than 7,000 people and has helped Musk transform Tesla into a major automotive manufacturer, large portions of Gigafactory 2, as this place is known, resemble an empty Walmart Supercenter. Tesla was supposed to be operating multiple production lines. Only one is set up, and it’s not yet fully automated. A mess of wooden crates with unused manufacturing equipment sits nearby.
The factory had been developed for another company, SolarCity, which Tesla bought in 2016 in a $2.6 billion deal. At the time, SolarCity was the country’s dominant installer of rooftop solar panels, and Musk called the purchase a “no-brainer,” arguing that the two companies were complementary. Critics pointed out that SolarCity had $2.9 billion in debt, and that Musk, as the chairman and largest shareholder in both companies, had serious potential conflicts of interest. (Musk recused himself from the board votes.) Tesla also inherited an agreement SolarCity had struck with New York state, which required it to spend $5 billion in the area over the course of a decade, in addition to meeting hiring targets.
Projects like this are increasingly controversial. “It’s a complete hoo-ha,” says John Kaehny, executive director of Reinvent Albany, a New York nonprofit focused on government accountability. “These mega subsidy deals take place in complete secrecy, without scrutiny from the public.” Kaehny’s critique could apply in Wisconsin, where Governor Scott Walker lost his reelection bid on Nov. 6 in part because of outcry over his support for a $3 billion incentive package to attract Foxconn Technology Co., a Taiwanese contract manufacturer, or in New York City and Alexandria, Va., which together offered Amazon.com Inc. an estimated $2.8 billion in tax breaks to open offices there.
Opponents of Tesla’s main patron, New York Governor Andrew Cuomo, a Democrat, have pointed to the Gigafactory 2 deal as a sign of his coziness with moneyed interests. Raymond Walter, a Republican in the New York State Assembly who lost a recent reelection bid, says he’s concerned the state has too many “eggs in the Tesla basket, which doesn’t seem like a very strong basket.” When Walter toured the factory in March, he recalls, “it was mostly empty. I would say 10 percent to 15 percent of the floor was being utilized for production. It was not an impressive use of $750 million in taxpayer funds.”
Tesla says it’s already exceeded its 2019 hiring commitments to the state; Gigafactory 2 employs about 800 workers. Yet in many ways, Musk’s solar plans have failed to live up to his lofty ambitions. The company’s solar deployments are down more than 60 percent from their peak under SolarCity, and Tesla has laid offthousands of solar employees around the U.S. Shah says the company has hired solar workers since then, but half of the Gigafactory 2 employees don’t work for Tesla, which subcontracts part of the factory to Japanese manufacturer Panasonic Corp. for solar panel and cell production.
With Musk focused on shoring up production of the Model 3 sedan, Gigafactory 2 has often seemed like an afterthought, a “stepchild,” as three people who’ve worked there called it. Musk has said he’s clocked 120 hours per week at Tesla’s car factory, yet he’s never so much as visited his Buffalo plant. And while Model 3 production is up to 4,500 cars per week, delays and manufacturing challenges at Gigafactory 2 have meant that earlier this year the company was making enough Solar Roof shingles for only three to five homes a week, according to two former employees. Tesla declined to comment on production figures.
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