Tesla and Panasonic are to work together to manufacture solar cells and panels in New York.

They have entered into a non-binding letter of intent which is subject to shareholder approval of Tesla’s buyout of SolarCity.

The car manufacturer intends to provide a long term purchase commitment for the cells and modules from Panasonic, which will be used in a solar system that works with its energy storage products – Powerwall and Powerpack.

Panasonic is expected to start production in Buffalo next year.

The collaboration extends the established relationship between the two companies, which includes the production of electric vehicle and grid storage battery cells at Tesla’s Gigafactory.

JB Straubel, Chief Technical Officer and Co-founder of Tesla, said: “By working together on solar, we will be able to accelerate production of high-efficiency, extremely reliable solar cells and modules at the best cost.”