(Reuters) – Walmart Inc (WMT.N) has sued Tesla Inc (TSLA.O), accusing it of “years of gross negligence and failure to live up to industry standards” that led to several fires at its stores with Tesla solar systems.
FILE PHOTO: Walmart’s logo is seen outside one of the stores in Chicago, Illinois, U.S., November 20, 2018. REUTERS/Kamil Krzaczynski
Walmart hired SolarCity to install solar panel systems on at least 244 of its stores. Tesla bought SolarCity in 2016, and Walmart alleges that Tesla did not fix the problems it inherited and was negligent itself.
Tesla has not responded to requests for comment or filed a response to the lawsuit. In Walmart’s August 20 filing, though, the U.S. retailer describes its view of how the fight developed over several years.
The following is a timeline based on Walmart’s lawsuit:
Walmart signs at least 244 contracts for solar systems with the company later bought by Tesla.
Tesla solar panels cause fires at Walmart stores in Long Beach, California, Milpitas, California and Lakeside, Colorado. They are not treated as related or systematic problems.
Walmart stores in Beavercreek, Ohio, Denton, Maryland and Indio, California experience roof fires. Hours before the Indio fire started, Tesla had dispatched personnel to the store; Walmart believes this was to attend to a possible alert.
Walmart and Tesla begin joint inspections of sites lasting until December 2018.
Over the course of Walmart inspections it says it finds hotspots in solar panels’ cracked sheets, compromising electrical insulation. It blames Tesla for failing to properly ‘hire, train and supervise’ its contractors.
It found Tesla put wires near sharp points and metal edges, used incorrect connectors that built up heat and failed properly to tighten connectors, used plastic tools with insufficient strength and plumbing tools, and improperly grounded systems, and kept poor records. During inspections, Walmart said, Tesla searched for problems with drones that lacked sufficient resolution to find panel “hotspots” and put tape on hotspots which exacerbated heat buildup.
By August 2019, Walmart says it received 29 inspection reports from Tesla itself. Those identified 157 “action items”, 48 of which Tesla characterizes as “reflecting conditions that rendered the sites unsafe or potentially unsafe”. Issues include improper wiring, poor grounding, broken solar panels with ‘hotspots”.
May 31-June 1, 2018
Walmart demands Tesla disconnect all of the solar systems, says that agreements materially breached. Tesla responds that it did not breach contract but agrees that it would be “prudent” to disconnect, inspect and fix systems. It subsequently disconnects the systems.
November 29, 2018
Walmart discovers a roof fire from a disconnected solar panel system on a store in Yuba City, California, due to sparking wires after insulation degrated.
Walmart says Tesla did not inform it about a ground fault alert it received between June 5 and Sept. 11, that year, at the same store. Walmart said such issues revealed Tesla’s “utter incompetence or callousness, or both.”
Tesla tells Walmart it has significantly enhanced its inspection protocols and begun a renewed series of site inspections aimed at reconnecting solar systems.
Walmart concludes that Tesla is not doing what is needed to ensure safety. It sends its second notice of breach of contract and gives it 30 days to fix. Tesla responds to Walmart with what the retailer called “unsubstantiated allegations”, says fires were “regrettable” and that some issues did exist. It says it is willing to satisfy most of the requirements by Walmart.
Walmart concludes its plan is “boilerplate” and falls short.
Walmart and Tesla trade letters. On Aug 20, Walmart files lawsuit against Tesla in New York State Supreme Court. It says: “Tesla has not reacted with the urgency that one would expect from a company that had installed solar panels that were catching on fire. Far from it: Tesla’s cavalier responses have only confirmed Walmart’s worries that its contractual counterparty is incapable of providing maintenance and inspection services sufficient to ensure the safety of Walmart’s customers, employees, and property”.
Reporting by Ayanti Bera and Arundhati Sarkar in Bengaluru; Editing by Saumyadeb Chakrabarty