Japanese manufacturing giants Panasonic is scraping its partnership with Tesla, established back in 2016.
The now-abandoned collaboration would have seen Panasonic produce solar panels at a factory in New York.
In a statement on Wednesday (Feb. 26), Panasonic noted that its production at the factory in Buffalo, New York will end by May, with an exit by September.
The electronics makers said that the decision comes as it seeks to streamline its global solar energy operations.
Panasonic, however, indicated it will continue making batteries for Tesla’s electric vehicles in another factory in Nevada.
Panasonic, quoting its former partner, argued that the move won’t affect Tesla’s solar business plans.
The Osaka-based company will also continue selling solar panels under its brand in the US through its own distribution channels.
A severance package will be offered to employees at the Buffalo plant, with Tesla agreeing to hire as many as possible of those who wish to keep working there, according to Panasonic.
“The decision to transition away from U.S. solar manufacturing in Buffalo aligns with our global solar strategy,” said Panasonic executive Shinichiro Nakajima.
Panasonic, one of the world’s largest home appliance manufacturers, offers its services and products for businesses as part of its operations.
Tesla, based in Palo Alto, California, is the world leader in electric vehicle sales.