Tesla, Elon Musk’s vehicle and renewable energy company, is now the subject of a lawsuit as Walmart alleges Tesla solar panels are responsible for fires at several Walmart locations across the country.
The suit claims breach of contract as Walmart says Tesla failed to meet industry standards in the installation of its solar panels atop hundreds of Walmart stores across the U.S. Walmart is now asking that Tesla remove solar panels from over 240 Walmart locations and that the company pay for all damages caused by the fires.
After news of the suit dropped, Tesla stock dropped over 1% in after-hours trading. Both Walmart and Tesla have yet to comment on the news.
In the suit, Walmart states, “As of November 2018, no fewer than seven Walmart stores had experienced fires due to Tesla’s solar systems-including the four fires described above and three others that had occurred earlier.”
Walmart claims the fires destroyed a large amount of merchandise and required significant repairs, causing hundreds of thousands of dollars in losses.
The complaint filed in New York State court on Tuesday states that Walmart inspectors discovered that Tesla “engaged in widespread, systemic negligence and had failed to abide by prudent industry practices in installing, operating and maintaining its solar systems.”
Walmart claims that many of the solar panels installed by Tesla had noticeable defects, indicating that Tesla did not perform sufficient inspection procedures. The company also alleges that “Tesla’s predecessor-in-interest — SolarCity — had adopted an ill-considered business model that required it to install solar panel systems haphazardly and as quickly as possible in order to turn a profit.”
Tesla is also currently under investigation by the U.S. National Transportation Safety Board due to claims from consumers that many Model X and Model S vehicles have burst into flames.
Tesla Solar Business Growth Initiatives
Recently, Tesla is pushing to revive its solar energy segment. Tesla acquired SolarCity in 2016 and began offering Tesla-branded solar panels. However, these solar panels weren’t viable for most consumers due to their high cost.
On Sunday, Elon Musk announced via Twitter that homeowners can now rent Tesla solar panels, starting at $50 per month.
The Rent Solar program is currently available in six states, and the monthly rental cost includes maintenance and installation. Tesla claims that there are no other additional costs or long-term agreements other than a $1,500 fee to remove the panels once service is canceled. Musk also revealed that this rental program will be available in Europe starting next year.
According to CNBC, Tesla installed just 29 megawatts of solar in the second quarter of 2019 — a record low. The company hopes that initiatives like the rental program and its new solar roof tiles will revive its solar division.
Walmart Plans to Purchase Trucks From Tesla
It’s yet to be seen how this lawsuit will affect the partnership between Walmart and Tesla.
In 2017, Walmart announced that it pre-ordered 15 Tesla electric semi-trucks for testing. At the time of the announcement, a Walmart spokesperson stated, “We have a long history of testing new technology — including alternative-fuel trucks — and we are excited to be among the first to pilot this new heavy-duty electric vehicle.”
More recently, Walmart pre-ordered at least 45 of these electric semi-trucks to add to its fleet.