Analysts Look at Future of Tesla in Buffalo, Public Subsidies

New York State spent nearly $1 Billion to construct the Riverbend facility

Government Officials Speak Glowingly about Tesla while touring the Riverbend facility (2016)

Government Officials Speak Glowingly about Tesla while touring the Riverbend facility (2016)

Buffalo, NY (WBEN) - What will the ripple effects of Panasonic's decision to drop out of its solar-panel partnership with Tesla be?

Analysts following the progress of Tesla's solar roof product, which still has not been mass produced since its unveiling in 2016, aren't too surprised at the "falling out" between the two companies.

"Panasonic and Tesla have really had a strained relationship," said Jill Schlesinger, host of Jill on Money. "They are fighting about battery costs, the running of their factories, and production delays." 

Beyond the future of Tesla's solar roof project, the news may bring in to question the future of public subsidies for large companies.

New York State spent hundreds of Millions of dollars more than the initial $750 Million pledged to construct the Riverbend facility that has become known as "Gigafactory 2."

"I think that in general, these municipalities paying for big companies to move in is really touchy. It's great to say 'we want to support this, there are jobs,' but now if we just paid $1 Billion to create 300 jobs, that's not a very good use of taxpayer money, is it?"

Tesla now says that they have hired over 1,500 people to work at the facility, which would surpass the State-mandated amount. However, that figure from the company came just over two weeks after Tesla reported to State Assemblyman Sean Ryan and others that over 1,100 workers had been hired at the plant, meaning an increase of over 400 employees in 19 days time. 

There has been little information on exactly what those employees are doing, as they do not include those who were hired by Panasonic. Tesla CEO Elon Musk has said the first media tour of the facility since it has become operational will happen in April.

No matter what the hiring process is, the Panasonic news may turn sour what's been a good run.

"Tesla's stock has been on a complete, crazy, upward tear as of about a week ago, so we're going to want to hear a little bit more about what he has to say," Schlesinger said. "It's a rough conversation to have to enter into. If your stock's been at an all time high, and then say we're breaking up with Panasonic on this solar panel plant, I think those are very divergent messages."

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