Walmart filed a multi-million dollar lawsuit against Tesla on Tuesday. The retail giant said Tesla’s “negligent installation and maintenance” of solar panels caused fires on the roofs of as many as seven Walmart stores since 2012.
Most people think of Tesla as an electric car manufacturer, but Tesla also sells other products related to renewable energy. Since the 2016 acquisition of SolarCity, Tesla has had a massive solar panel business. Walmart hired SolarCity to install and manage solar panels on the rooftops of more than 240 Walmart stores. Unfortunately, Walmart says, these solar installations have a habit of catching fire.
A fire broke out in March 2018 on the roof of a Walmart in Beavercreek, Ohio.
“Local news pictures and videos of the store showed lots of black smoke coming from the fire as firefighters arrived at the scene,” Walmart said in its lawsuit. Customers and employees escaped safely, but the fire caused extensive damage to the store and destroyed hundreds of thousands of dollars in merchandise.
In June 2018, Walmart suffered two fires just eight days apart—one in Denton, Maryland and the other in Indio, California. The Indio fire alone caused millions of dollars of damage, Walmart said.
Walmart has previously suffered fires in stores with SolarCity installations in 2012, 2016, and 2017, but the company has written these off as isolated accidents. But a string of three fires in as many months is hard to ignore. So Walmart asked Tesla to disable all of its Walmart solar panels pending an investigation. Even after doing this, Walmart suffered another fire at a store with Tesla solar panels—this one at the Yuba City, California store in November 2018.
“Widespread, systemic neglect”
Walmart said that Tesla’s self-inspections revealed “a total of 157 items requiring repair or replacement of system components, 48 of which Tesla itself identified conditions that made the points unsafe or could protective.” Subsequent inspections of Walmart itself revealed even more problems, the retailer charges.
Walmart’s investigation “revealed that Tesla engaged in widespread, systematic negligence and failed to adhere to common industry practices in installing, operating, and maintaining its solar systems,” Walmart said.
Walmart further said that Tesla is suing it on charges of dealing with defective solar panels.
“Despite months of back-and-forth with Walmart, Tesla has yet to pay one percent of the out-of-pocket damages and advice/inspection costs that Walmart has incurred as a result of the fires in Denton, Indio, and Yuba City, according to as well as consulting and attorneys’ fees related to the Beavercreek fire,” Walmart wrote in its Tuesday complaint.
Tesla has not yet responded to an email Tuesday afternoon seeking comment.
Walmart’s lawsuit is more than 100 pages long, including pages of detailed descriptions of Tesla’s installation problems. Under its contract with Walmart, Tesla is supposed to perform regular maintenance on the solar panels. But Walmart says Tesla failed to properly hire, train, and supervise contractors performing installation and maintenance work for Tesla.
Among the problems Walmart says it has identified:
- “Many of the Tesla solar panels that Walmart has tested suffer from hot spots, which cause the back sheets on the solar modules and electrical insulation to deteriorate.”
- “Making it worse, Tesla has shown or identified hot spots by placing pieces of tape on the affected areas. Because this tape prevents sunlight from reaching the solar panel, it exacerbates the problem by absorbing more heat.”
- “Tesla teams often fail to roll over (or take) field-made connections.” “Lack of torqueing (sic) leads to moisture and water intrusion.”
- “Sharp points—from, among other things, rough concrete or metal edges—are cutting into or abrading the wires. In some cases, temperature changes lead to the expansion and contraction of the wires over time too much, moving the wires and resulting in their abrasion or exposure. .
- Many sites have improper grounding.
Walmart said it spent months trying to work with Tesla to fix the problems but found Tesla’s responses unsatisfactory. So now he’s suing Tesla—seeking not only damages but also permission to remove Tesla’s solar panels from its stores.
Tesla’s 2016 proposal to acquire SolarCity was controversial from the start. SolarCity was founded by relatives of Elon Musk, and Musk was an early investor and chairman of the board. Critics charged that Tesla’s acquisition of the debt-ridden company was at the expense of its shareholders—including Musk himself.
The acquisition does not appear to have changed SolarCity’s assets. Tesla’s solar panel division has struggled with manufacturing problems and declining market share. Many of the employees Tesla laid off earlier this year remain in the solar division, and Tesla plans to end a partnership with Home Depot by the end of the year.
Update (Friday, August 23): Tesla now says it is working with Walmart to resolve the dispute.