Tesla was sued by Walmart over roof fires the retailer claims were started by Tesla solar panels, days after Elon Musk announced efforts to revive the struggling home solar business.

 Walmart, according to a breach of contract complaint filed in New York, asked Tesla to remove its solar panels from more than 240 stores where they had been installed, and to repair damages caused by fires.

“Between March and May 2018, three Walmart properties in three different states — all with solar panel systems owned, operated, and maintained by Tesla — experienced fires that originated with Tesla’s solar panels, resulting in significant damage and endangering the safety of Walmart customers, employees, and the public,” wrote Walmart counsel James P. Rouhandeh in the Aug. 20 complaint.

Tesla last week announced a plan to rent solar panels to homeowners for as little as $50 a month. The unit is losing market share and customers. Earlier this year, the company was slashing prices in an attempt to revive the business, the New York Times reported.

  • Tesla acquired the solar business — then known as SolarCity — in 2016 for about $2.6 billion. Critics alleged Musk and other conflicted Tesla directors orchestrated Tesla’s acquisition of SolarCity to protect their personal investments in SolarCity.
  • Tesla is also facing an ex-employee’s defamation and whistleblower lawsuit filed in federal court in Nevada. The legal embroilment began last year after an internal memo written by Tesla CEO Elon Musk alleged that former employee Martin Tripp had engaged in sabotaging the Tesla car.
  • Neither Tesla nor Musk have responded publicly to Walmart’s lawsuit. 

Karma Takeaway: The lawsuit is a black eye for Tesla’s solar business at a time when it is working hard to attract customers.