Inventory at a warehouse
Tesla solar energy systems reportedly ignited at an Amazon warehouse in Redlands, California last June, and the Seattle e-commerce titan confirmed that it has no further plans to buy solar energy systems from Tesla.
The news, first reported by Bloomberg, follows a tumultuous week for Elon Musk’s renewable energy and electric vehicle company. On Tuesday, Walmart sued Tesla over solar panels that ignited atop seven of its stores in recent years. Tesla and Walmart have been partners on clean energy initiatives for years; more than 240 Walmart stores have Tesla solar systems installed.
In its complaint, Walmart claimed that: “Tesla routinely deployed individuals to inspect the solar systems who lacked basic solar training and knowledge.”
In the suit, they also alleged that Tesla failed to ground its solar and electrical systems properly, and that Tesla-installed solar panels on-site at Walmart stores contained a high number of defects that were visible to the naked eye, and which Tesla should have found and repaired before they led to fires.
However, Walmart and Tesla said in a statement on Thursday that they “look forward to addressing all issues and re-energizing Tesla solar installations at Walmart stores, once all parties are certain that all concerns have been addressed.”
It’s not clear whether Amazon will extend Tesla the same courtesy.
Amazon confirmed that it only has a small number of solar systems installed by Tesla, and took measures where those systems were installed to protect both its workers and operations.
Tesla did not immediately return requests for comment.
The electric vehicle maker is currently facing stockholder litigation over its acquisition of SolarCity for $2.6 billion in 2016. Rampant problems with Tesla’s solar business could bolster the arguments of stockholders who viewed that as a bad deal.
Gordon L. Johnson, managing director at The Vertical Group and a staunch Tesla bear, said:
“With Boeing, two 737 Max jets went down. Outside of those? There were probably thousands of 737 Max jet flights that took off and landed safely, but the fear of that potential caused Boeing to have to ground all of their jets. In my opinion, these solar rooftop fires create a potentially significant headwind for Tesla, and potentially serious legal liabilities.”
His firm estimates that Tesla’s liabilities could amount to between $250 million and $1 billion, considering the Walmart lawsuit, and other claims and complaints that he expects will arise across Tesla’s solar energy business following news of these fires.