While Tesla (NASDAQ: TSLA) has had more than its fair share of bad news throughout 2019, today it received an unexpected piece of bad news in the form of a lawsuit from one of America’s largest retailers.
Walmart (NYSE: WMT) announced that they will be suing Tesla for what it refers to as “gross negligence” in regards to the installation and maintenance of solar panels that were put in place at several of their stores.
Walmart licensed or leased roof space to Elon Musk’s company at over 240 stores to help the retailer lower energy costs through recycling solar energy. However, several stores saw these systems catch on fire, leading to various damages and other issues. Since November of last year, seven stores had caught on fire due to Tesla’s solar systems.
After conducting an investigation, Walmart found that there was “widespread, systemic negligence” on the part of Tesla and that the company had completely failed to abide by industry practices. Specifically, they said that there wasn’t sufficient installation work done on these systems, implying that they could have been caused by rushed installations. While Tesla tried to fix issues found in later inspections, they weren’t enough to prevent many of these fires from breaking out.
“To state the obvious, properly designed, installed, inspected, and maintained solar systems do not spontaneously combust, and the occurrence of multiple fires involving Tesla’s solar systems is but one unmistakable sign of negligence by Tesla,” the complaint read. “Tesla has breached all of the solar-panel system contracts with Walmart, and operation of the systems at present would create an immediate and imminent risk of injury and harm to Walmart, its customers, its employees, and its property,” it added.
Walmart has now asked that Tesla uninstall all of its systems installed at its stores as well as pay damages and expenses that come from these fires. Earlier this week, Tesla announced that they would be offering solar panels to rent, helping cut down at the typically expensive initial installation costs that deter many people from using solar panels. However, today’s development will likely deter many future customers from trusting in Tesla’s panels.
Shares of Tesla fell a bit in response to this piece of news, dipping by around 2 percent total including after-hours trading. While shares of the car maker broke back above the $200 per share price point, they’ve ended up petering off, failing to return to previous highs above the $250 per share price level, let alone around $300 where Tesla used to trade many months ago.
Tesla Company Profile
Founded in 2003 and based in Palo Alto, California, Tesla is a vertically integrated sustainable energy company that also aims to transition the world to electric mobility by making electric vehicles. It sells solar panels and solar roofs for energy generation plus batteries for stationary storage for residential and commercial properties including utilities.
The Tesla Roadster debuted in 2008, Model S in 2012, Model X in 2015, and Model 3 in 2017. Global deliveries in 2018 were 245,506 units. Tesla went public in 2010 and employs about 50,000 people. – Warrior Trading News
