Walmart Sues Tesla Over Rooftop Solar Fires
Credit to Author: Steve Hanley| Date: Thu, 22 Aug 2019 17:36:52 +0000
Published on August 22nd, 2019 | by Steve Hanley
August 22nd, 2019 by Steve Hanley
Update: This story may not be as straightforward as initially presented:
Juicy Alert.
It wouldn't be Walmart if there were no failure to pay
$TSLA couldn't get Walmart to review Site reports prepared according to mutually agreed protocol
Walmart referred $TSLA to their consultant who refused to comment on reports because Walmart failed to pay him pic.twitter.com/ovmT0EzV9G
— Vladimir Grinshpun (@VGrinshpun) August 22, 2019
We’ve reached out to Tesla to ask for further commentary.
Another update (full linked document also available here):
Wal Mart are going owe Tesla a lot of money…https://t.co/I1Bz1oMsV5
— Lycanthrope (@AskDrStupid) August 22, 2019
As a 3rd update, read our new piece on this story, which is basically Part 1 of this subject: What’s The Real Reason Walmart Is Suing Tesla?
Back in 2010, Walmart was one of the first major companies to get involved with the solar power revolution. It teamed up with SolarCity, the rooftop solar company started by Elon Musk’s cousins Lyndon Rive and Peter Rive, to install rooftop solar arrays on 224 of its stores.
To date, seven of those rooftop installations have caught fire, causing millions of dollars in structural damage and lost sales. Unable to resolve their differences, Walmart has now sued Tesla, claiming the company, which purchased SolarCity in 2016, has been guilty of a long list of failings ranging from negligence to incompetence to mopery on the high seas.
Image courtesy SEIA/Solar Means Business report
We are accustomed to thinking of Tesla as a well managed company with a clear road map to the future in place. Yet it has floundered repeatedly with the solar end of things since acquiring SolarCity, a decision many analysts said at the time was little more than a bailout for a pair of cousins whose company was about to sail over the brink of viability into the ignominy of bankruptcy.
According to a reporter at Business Insider who has a long history of negative Tesla stories, the complaint by Walmart says Tesla has no explanation why the rooftop systems caught fire, adding that Tesla had no accurate drawings of the solar panels, no procedures in place to deal with the issue, and no employees trained in how to inspect or fix them. In fact, its own employees had to show Tesla employees where there were cracks and temperature issues involving the solar panels.
Tesla says its inspections found 157 areas that need repair or replacement at all 224 stores. Walmart claims the total number of defects is far higher. “On information and belief, the actual conditions are worse than as documented by Tesla, based on Tesla’s history of deficient and incompetent inspections, including Tesla’s reliance on untrained, unqualified, and unsupervised personnel to install and maintain the systems,” Walmart said in its court filing.
According to CNBC, Walmart alleges in its claim that Tesla bought SolarCity to “bail out the flailing company” and mentions SolarCity 46 times throughout the lawsuit. The complaint further alleges that SolarCity created a culture that tolerated defects because of its desperate need to keep cash coming in the door and that Tesla has failed to address that issue.
Lastly, it also accuses Tesla of filing reports that said it had made repairs to Walmart’s roofs when it had not. As part of the relief sought, Walmart is seeking to terminate its solar roof contract with Tesla and force Tesla to remove all the rooftop systems it has installed on the roof of Walmart stores.
The suit raises a lot of “he said, they said” issues that will get thoroughly hashed out in court. But the most important threat to the company comes from what Tesla may or may not have told its investors — both stockholders and bondholders — about its financial exposure as a result of the Walmart situation. Business Insider asks a number of cogent questions:
CleanTechnica is often accused of being a Tesla fanboy site. It’s true that we do write a lot of articles that are laudatory of the company and its chief executive. Yet, it’s possible our hero has the proverbial feet of clay. He does have a penchant for over-promising and under-delivering, for moving fast even when yellow caution lights are flashing.
Plenty of outside observers have suggested Elon Musk bullied the board of directors for both Tesla and SolarCity to approve a merger without completing the due diligence such a decision required. Since the merger, Tesla has altered its solar business model multiple times, first dismantling the door-to-door sales model SolarCity followed, then announcing a major link-up with Home Depot that was quickly cancelled, and also rolling out a splashy reveal of the Tesla Solar Roof nearly two years ago.
In the meantime, Gigafactory 2, the Tesla solar factory in Buffalo, New York, seems to be drifting along and doesn’t get the attention, fanfare, or revolutionary output figures many expected. Even deliveries of the company’s Powerwall residential home battery are way behind schedule. But for the company’s success in utility-scale battery storage, the SolarCity piece of the Tesla puzzle seems to be running poorly and is a huge hit to Musk’s aura of invincibility.
It’s not hard to argue that Tesla could have pursued its energy storage ambitions without taking on the debts of SolarCity. The latest debacle with Walmart could be a serious black eye for the company, one that could cause a loss of confidence in Tesla and its leadership at a critical time for the company.
Steve Hanley Steve writes about the interface between technology and sustainability from his home in Rhode Island and anywhere else the Singularity may lead him. His motto is, “Life is not measured by how many breaths we take but by the number of moments that take our breath away!” You can follow him on Google + and on Twitter.