Tesla has announced plans to scale up its own solar panel manufacturing, marking a return to ambitions in the sector nearly a decade after acquiring SolarCity. The company unveiled a new line of residential solar panels and aims for massive production increases amid rising electricity demand. CEO Elon Musk highlighted the underestimated solar opportunity during the firm's latest earnings call.
Tesla's pivot back to solar panel production comes as the company reported a 61% plunge in net income for the fourth quarter of 2025. During the earnings call, CEO Elon Musk described Tesla as a 'physical' AI company, focusing on electric robotaxis and humanoid robots, while committing $20 billion in capital spending. He also revealed renewed emphasis on solar, stating, 'We are also going to be a significant manufacturer of solar cells' alongside its own AI chips.
The announcement builds on Tesla's underutilized Buffalo, New York, plant, acquired in the 2016 SolarCity deal. After Panasonic exited the partnership in 2020, Tesla relied on third-party panels for its booming battery storage sales. Now, facing spikes in electricity demand and utility rates, the company is shifting to in-house production. Tesla is scaling up the Giga New York factory to an initial capacity of 300 megawatts per year for solar modules.
Last week, Tesla unveiled its new residential solar panels at the Tesla diner in Los Angeles. The panels feature an all-black finish, sit closer to the roof, and deliver 420 watts of power, up from 410 watts previously. They use cascading cell technology from Solar Roof cells, creating 18 power zones—three times more than conventional panels—to reduce shading losses and boost energy output. Dimensions are 71.1 inches by 44.7 inches by 1.57 inches, with 20.5% module efficiency and a weight of 49 pounds. The panel mount enables 33% faster installation via a groove-based frame, eliminating traditional rails and clamps, and reduces roof penetrations by up to 15% while compatible with various roof types.
Musk emphasized the potential, saying, 'The solar opportunity is underestimated. That's why we are going to work towards getting 100 gigawatts a year of solar cell production, integrating across the entire supply chain from raw materials all the way to finished solar panels.' In 2023, Tesla deployed 223 megawatts of solar, and over the past decade, it installed nearly 4 gigawatts of solar roofs on 480,000 homes. Solar roofs remain in low-volume, high-cost production.
This move positions Tesla to capitalize on solar and battery storage demand, even as it trails in electric vehicles and autonomous tech.
