Walmart is suing Tesla for breach of contract and gross negligence after rooftop solar panel systems on seven of the retailer’s stores allegedly caught fire, according to a filing.
Walmart said the lawsuit, which was filed Tuesday in New York state court, arose from years of gross negligence and failure to live up to industry standards by Tesla and the solar panels it designed, installed and promised to operate and maintain safely on the roofs of hundreds of Walmart stores.
Bloomberg was the first to report on the court filing. The lawsuit is aimed at Tesla Energy Operations, a division within the clean energy and electric vehicle automaker that was formerly known as SolarCity.
Tesla did not return a request for comment. A Walmart spokesperson said there was nothing else to add beyond the lawsuit filed Tuesday. TechCrunch will update the article if Tesla responds.
The lawsuit comes just days after Tesla CEO Elon Musk announced a new rental offering for solar power in a bid to reboot the flagging renewable energy business. Tesla’s share of the solar market has declined since its merger with SolarCity in 2016. In the second quarter Tesla deployed only 29 megawatts of new solar installations, while the number one and two providers of consumer solar, SunRun and Vivint Solar, installed 103 megawatts and 56 megawatts, respectively.
Walmart has asked Tesla to remove solar panels from all 240 locations where they have been installed as well as pay for damages related to fires that the retailer alleges stem from the panels. The lawsuit points to several fires on the retailer’s rooftops that allegedly stem from Tesla solar panels.
The lawsuit states:
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. 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 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.
Unsatisfied with Tesla’s actions, Walmart requested in May 2018 that the company disconnect all of the solar panel systems, according to the lawsuit. Tesla complied. However, Walmart alleges that another fire erupted even after the systems were disconnected.
In Walmart’s view, numerous problems with the design and installation were propelled by SolarCity’s business model, which relied on “installing as many solar panels as quickly as possible.”
SolarCity’s business model was ultimately a bust. Unbeknownst to its customers until public reports later exposed its shoddy practices, SolarCity suffered from “a quality assurance problem,” the lawsuit alleges.
Tesla announced plans to merge with SolarCity in 2016 in a controversial all-stock $2.6 billion deal that closed in November of that year.