Replicating Tesla Motor Inc (NASDAQ:TSLA)‘s Gigafactory plans, Elon Musk’s SolarCity Corp (NASDAQ:SCTY) has acquired Silevo, which is a solar module manufacturer, in order to get its own share of the solar manufacturing market. As of now the solar panel manufacturing is highly concentrated in China, but now with the acquisition of Silevo, SolaCity plans to set up its facility in Buffalo and give a direct competition to the Chinese manufacturers. During an interview with Bloomberg, SolarCity Corp (NASDAQ:SCTY)’s CEO, Lyndon R. Rive explained the cost effectiveness about its plans and the role of Elon Musk in making the decision.
Though Silevo is having a small 32 Mw facility in China, SolarCity Corp (NASDAQ:SCTY) is planning to open a facility in New York. Rive said:
“The facility what we are planning on building out, the initial facility is a gigawatt facility, which makes it one of the largest in the world.”
Rive added that their preference of facility in the U.S. over China is due to the fact that they will be able to produce high efficient models at par with the standard efficiency models. Moreover, the lower energy cost, higher automation without the need to of transportation from China to the U.S. will take out those costs. Thus, making the effective install cost per kW lowest in the world.
Relationships To Expand
The CEO of SolarCity Corp (NASDAQ:SCTY) denied the fact that having a facility in the U.S. will at all, impact their existing relationship with partners.
“If you look at out growth curve, our own manufacturing capacity won’t be able to keep up with our initial growth curve.”
Talking about the role of Elon Musk in guiding through this strategy, Rive said, “He was very involved in this decision.” Rive gave insights as to how the decision is aimed to generate power through solar panels that are cheaper than using fossil fuels. Hedge fund managers John Burbank and Kenneth Tropin initiated brand new positions in SolarCity Corp (NASDAQ:SCTY) during the first quarter.