All Fired Up: Walmart Sues Tesla

No, Walmart was not using fleets of pricey electric vehicles to get 56-cents-a-pound bananas to budget-conscious shoppers; rather, the chain had outfitted a slew of its stores with rooftop solar panels assembled and managed by Tesla subsidiary SolarCity.

Now Walmart’s feeling burned. Literally.

Following rooftop blazes at at least seven stores and a recent investigation, the shopping giant filed a lawsuit against Tesla on Tuesday, alleging the company “engaged in widespread, systemic negligence and had failed to abide by prudent industry practices in installing, operating, and maintaining its solar systems.”

Walmart’s relationship with SolarCity goes back a number of years; a trio of earlier fires in 2012, 2016, and 2017 were brushed off as random flukes. Then the fires began occurring with greater frequency.

In a suit filed to the Supreme Court of the State of New York (New York County), Walmart describes three fires in 2018 — March 7th in Beavercreek, Ohio, May 21st in Denton Maryland, and May 29th in Indio, California — and asks the question, “Why were multiple Walmart stores located all over the country suddenly catching fire?”

Walmart’s answer? “The stores all had Tesla solar panels installed by Tesla on their roofs. At each location, the fire had originated in the Tesla solar panels.”

In total, Walmart leased or licenced roof space on 240 of its stores to Tesla for the installation of solar energy systems designed to lower Walmart’s utility bills. Under the deal, Tesla retained ownership of the systems. Following the early-2018 fires, Walmart asked Tesla to “de-energize” its stores. The solar arrays went dark on May 31st, but that didn’t stop a small fire from breaking out in November 2018 on a Walmart roof in Yuba City, California. Wires were still sparking when employees discovered it, Walmart claims.

“To this day, Tesla has not provided Walmart with the complete set of final “root cause” analyses needed to identify the precise defects in its systems that caused all of the fires described above,” the suits reads. “The number of defects, however, is overwhelming and plainly indicative of systemic, widespread failures by Tesla to meet the standard of care, as set forth in the governing contracts, as to the solar systems installed at Walmart’s stores.”

An investigation launched in December 2018 turned up numerous “hotspots” and “dangerous wire connection practices,” the retailer states. Loose, hanging, and abraded wires were not in short supply, it continued, and many systems were not properly grounded.

This was all evidence of “widespread negligence,” Walmart claims, alleging that “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, and the contractors and subcontractors who performed the original installation work had not been properly hired, trained, and supervised.”

In purchasing SolarCity, Walmart claims, Tesla failed to reform the company’s “chaotic installation practices” and failed to keep proper documentation relating to the systems. Still, the two companies moved forward with an aim to re-energize the stores. Clearly, that did not end up happening. A follow-up investigation by Tesla in 2019 reportedly uncovered 157 action items, 48 of which posed a safety threat or potential safety threat, across 29 inspection reports.

At that point, the two companies found themselves at loggerheads. Despite assurances from Tesla, Walmart says it felt its green energy partner was not up to the task of safely managing the solar systems.

“In light of Tesla’s breaches of the contracts, Walmart now seeks a declaration that Tesla has breached its contractual obligations and recovery of the out-of-pocket costs and other contractual payments that Tesla has refused to pay, along with any other damages and relief that this Court deems just and proper,” the retailer states.

Tesla purchased SolarCity, a company founded by CEO Elon Musk’s cousin, in 2016, with Musk serving as the company’s chairman and largest stockholder. The company has since undergone layoffs and seen the closure of installation facilities as it grapples with money issues.

[Image: Walmart]