The world's second largest retailer sues Musk's company

Elon Musk's solar energy project has problems: Walmart, which has only recently lost the title of the world's largest retailer to Amazon, has claims against his company.

What happened. Walmart has filed a lawsuit against Tesla because solar panels installed on the roofs of supermarkets provoked fires, Reuters writes , citing documents received by the New York State Supreme Court. The trading network believes that “systematic criminal negligence” during their installation and inspection is to blame: from 2012 to 2018, there were seven cases of fire, which caused severe damage to store buildings and goods. Walmart requires Tesla to dismantle the batteries and pay millions in damages.

• It's a painful blow to Tesla: the news of the lawsuit came just as Musk announced he was restarting a project to install solar panels on private homes. Quotes of the company on the news fell by 1.7%, since the beginning of the year the drop has reached 32%.

Details. A Walmart investigation revealed that Tesla employed incompetent employees who did the installation in a hurry to install the batteries. For example, where elevated temperatures could lead to a fire, Tesla employees used duct tape - this is a combustible material.

• It's not so much the solar panels themselves, but the fact that in large systems the voltage of series-connected panels easily reaches 500-1000 volts. This implies high requirements for the quality of installation. During one of the fires, even batteries disconnected from the power supply continued to spark, Walmart notes.

Solar panels for Walmart have been manufactured and installed since 2010 by SolarCity, which Tesla bought for $2.6 billion three years ago. Since then, the retail chain has installed SolarCity solar panels in 244 of its nearly 5,000 US stores. Its goal is to get 35% of energy from renewable sources by 2020.

Context. Musk tweeted over the weekend about cutting prices and "restarting" the solar business, renaming it Tesla Solar. He called the solar panels themselves “a money printer on the roof”, as they can help residents of regions with high electricity prices to save significantly. At the same time, Musk offered customers in six states to rent Tesla rooftop solar systems without a contract for as little as $50 a month ($65 a month in California). “One click and you save $500 a year in bills without entering into a long-term contract (you can opt out at any time),” he wrote .

• Musk did not indicate that if the client decides to cancel the lease or install larger panels, he will have to pay an additional $1,500. This follows from the FAQ section on the company's website.

https://twitter.com/elonmusk/status/1163028150390947841?s=20

What's next. In November of this year, Tesla must pay off the debts of SolarCity, which were transferred to the company as a result of the deal, the FT points out . We are talking about $ 556 million convertible bonds. Tesla promised shareholders to increase profits from the installation of solar panels so much that it would exceed the debt left from the previous owners.

The businessman is not going smoothly with Tesla itself. At the end of July, the company's shares fell 11% after it posted a $408 million loss in the second quarter. Tesla's losses were three times the company's expectations, and worse, came in a quarter with a 50 percent increase in sales. This again made investors question the very business model of the company. At the same time, Tesla's co-founder, CTO JB Strobel, left the company after 15 years. Last year, he began selling off $30 million worth of his Tesla shares.