What just happened? Things have heated up between Walmart and Tesla after solar panels installed at seven of the retail company's stores allegedly caught fire and set ablaze their rooftops and merchandise. Walmart has filed a lawsuit against Tesla in the New York State Supreme Court for breach of contract citing Tesla's negligence and failure to meet industry standards. Taking precautionary measures, the retail giant has also asked Tesla to remove solar panels installed at more than 240 of its stores and pay for all the resulting damages.
In a lawsuit filed by Walmart against Tesla Energy Operations, a subsidiary of the company formerly known as SolarCity, the retail giant has stated a breach of contract after several of its stores suffered from fire damage allegedly caused by faulty Tesla solar panels, reports Bloomberg.
Citing Tesla's "years of gross negligence and failure to live up to industry standards," Walmart recalled multiple fire incidents in the past at its stores in Ohio, Maryland and California that caused millions of dollars worth of losses for the company and closure of its stores for several days.
Walmart says the stores in these locations "were three of more than 240 stores where Walmart had leased or licensed its roof space to Tesla for the installation, operation, and maintenance by Tesla of photovoltaic (i.e., solar) systems," notes Walmart and that Tesla, which designed the panels, "represented them as safe, reliable, and an environmentally conscious way for Walmart to reduce its energy costs."
Walmart says that the contract between the two companies as a result of this business shows Tesla retaining the ownership of the solar systems and that it "promised to design, install, inspect and maintain them non-negligently and in accordance with prudent industry practices, and agreed to handle every aspect of the solar panels' operation on Walmart's roofs in a non-negligent manner," giving Walmart the right to enjoy perpetually safe and reliable solar panel systems and making the company "free of any operation or maintenance responsibilities," which it says "fell entirely on Tesla."
The lawsuit further notes that by May 2018, Tesla was clearly in breach of its contractual obligations and even to the present day, it has not provided Walmart with the complete set of final "root cause" analyses for identification of defects in its solar panels.
Later that month, the retail giant asked Tesla to "de-energize" all solar panels installed across Walmart sites to which Tesla complied "conceding that de-energization of all the sites was "prudent" and recognizing that it could provide no assurances that the deficiencies causing its systems to catch fire were confined to particular sites or particular components."
These measures however, weren't enough to prevent additional fires as one of Walmart's stores in Yuba City, California, caught fire in November 2018 despite being de-energized since June 2018.
Wires on the store's rooftop were still sparking at the time that Walmart discovered the fire and could have ignited more extensive flames, with potentially devastating consequences. Equally troubling, after Tesla technicians visited the rooftop, one of the technicians failed to close the cover to a combiner box, exposing this important piece of equipment to the elements and thereby creating a fire hazard. Still more troubling, Walmart subsequently learned (independent of Tesla) that a potentially dangerous ground fault alert had occurred at the Yuba City site during the summer of 2018. Tesla either ignored the alert or deliberately failed to disclose it to Walmart. The issues that caused that ground fault alert likely caused or contributed to the subsequent fire in the fall of 2018, revealing Tesla's utter incompetence or callousness, or both.
The lawsuit comes just days after Tesla CEO Elon Musk announced a new rental offering for solar power to boost the company's ailing renewable energy business that could only manage to install 29 megawatts of solar power in its Q2 2019 (record low in a single quarter). Tesla's stock dipped by 1% after the news went out with the company yet to officially respond to the lawsuit, shown below in full: