Elon Musk
Mike Blake | Reuters
Shares of Tesla were down about 2% on Wednesday in an otherwise strong market on news that Walmart is suing the company’s energy division.
By comparison, the broader market moved higher, with the Dow Jones Industrial Average up more than 300 points, or more than 1%, at one point.
In a lawsuit filed Tuesday, Walmart alleged that Tesla solar panels installed atop seven of its stores had caught fire. Walmart is suing for breach of contract, gross negligence and failure to live up to industry standards.
“As of November 2018, no fewer than seven Walmart stores had experienced fires due to Tesla’s solar systems – including the four fires described above and three others that had occurred earlier,” the lawsuit states.
The retailer is asking the court to force Tesla to remove solar panels from more than 240 Walmart stores where they were installed, as well as pay damages related to all the fires.
Walmart alleged that Tesla “routinely deployed individuals to inspect the solar systems who lacked basic solar training and knowledge.”
The lawsuit has revived concerns about Tesla’s $2.6 billion acquisition of SolarCity in 2016. Walmart alleged in its claim that Tesla bought SolarCity to “bail out the flailing company” and mentions SolarCity 46 times throughout the lawsuit.
It comes as Tesla’s stock price has suffered over the past year, with shares down roughly 31% year to date. CEO Elon Musk’s now-infamous tweet about taking the company private kickstarted a rough year for the company, followed by litigation, government inquiries, layoffs and operational challenges.
Tesla did not return a request for comment on the suit.
