Adding to the woes of Tesla's faltering solar business, Walmart is suing Tesla Energy Operations over fires on the rooftops of more than half a dozen US stores, allegedly sparked by shoddy solar arrays installed by SolarCity, which the Silicon Valley electric vehicle and battery developer acquired in 2016.
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Register NowIn a lawsuit filed Aug. 20 in New York state, Walmart described its move as a "breach of contract action arising from years of gross negligence and failure to live up to industry standards by Tesla," which had committed to operate the systems "safely on the roofs of hundreds of Walmart stores."
The complaint came two days after Tesla CEO Elon Musk announced on Twitter that the company had relaunched its solar business with a new rental strategy and as Tesla tries to douse fire safety concerns related to lithium-ion battery systems after a spate of recent fires not involving its own installations.
Walmart alleged that arrays Tesla inherited from SolarCity ignited fires at seven stores in California, Maryland and Ohio between 2012 and 2018, causing millions of dollars in damages. The big-box retailer, saying it feared for the safety of its customers and worried over potential additional damages and store closures, demanded in May 2018 that Tesla disconnect all of the roughly 240 systems SolarCity had installed. Tesla complied, disconnecting its entire fleet of Walmart solar projects, according to the complaint.
WANTS ALL PANELS GONE
Shutting off the projects did not, however, prevent a fire on the roof of a store in Yuba City, California, in November 2018, caused by live wires, the lawsuit alleged. Walmart asked the court to require Tesla to remove all of its solar panels from the retailer's locations and to award damages in connection with the fires.
"Many of the problems stemmed from a rushed, negligent approach to the systems' installation," Walmart said in the lawsuit, citing 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." Contractors and subcontractors who installed the systems "had not been properly hired, trained and supervised," the lawsuit claimed.
SEEKING ROOT CAUSE
Tesla has not provided Walmart with a root-cause analysis identifying precisely what triggered the fires, it added.
Tesla did not immediately respond to a request for comment on the allegations.
The company's solar division has seen installation volumes plummet since acquiring SolarCity, falling to just 29 MW in the second quarter of 2019 from 176 MW in the second quarter of 2017.
After shifting away from rooftop solar leases preferred by SolarCity, Tesla has sought to revive its solar business with a roof-integrated solar tile, introduced more than two years ago. In April, Musk said the company was on "version 3" of the product, which Tesla plans to ramp up this year at a factory in Buffalo, New York.
-- Garrett Hering, S&P Global Market Intelligence, newsdesk@spglobal.com
-- Edited by Bill Montgomery, newsdesk@spglobal.com