January 23, 2018 / 11:16 PM / 7 months ago

Fine print in Trump solar tariff holds some good news for Tesla

LOS ANGELES, Jan 23 (Reuters) - Electric vehicle maker and solar installer Tesla Inc. said on Tuesday that it does not expect President Donald Trump’s solar tariff to have much impact on its high-tech solar manufacturing ambitions, thanks to a clause exempting a vast amount of solar panel components from the levies.

Trump’s order, signed into law on Tuesday, imposes a 30 percent tariff on fully assembled imported solar panels as well as the cells of which the panels are made - a move intended to protect American jobs but which the solar industry worries will raise costs and trigger thousands of layoffs.

But in a twist destined to help the California company, the solar cell tariff only kicks in after 2.5 gigawatts worth hit U.S. shores each year.

Tesla uses solar cells in its nascent solar roof tile business. The tiles generate electricity without the need for a traditional panel. Tesla also has plans to build conventional panels using imported cells for its U.S.-based residential installation business, which it also hopes to grow over the coming years.

Tesla said on Tuesday it expects to be able to import “some or all of our non-U.S. cells for Solar Roof and solar panel modules free of tariffs.”

Only 500 MW worth of solar cells were imported into the United States in total last year, according to the Solar Energy Industries Association, a fifth of what is being exempted from Trump’s tariff.

Baird analyst Ben Kallo agreed the tariff was generally positive for Tesla as it will make its domestic products more competitive with imports - though he noted its installation business will pay higher prices for imported panels in the short term. Tesla shares rose $1.23, or 0.3 percent, to close at $352.79 on Tuesday.

Tesla had been part of a group of domestic manufacturers that lobbied against tariffs on solar products. (Reporting by Nichola Groom; Editing by Cynthia Osterman)

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