Tesla and Walmart settle over solar rooftop fires

Key Points
  • Walmart and Tesla have settled a lawsuit that the retailer had filed against Elon Musk's renewable energy business in August.
  • After seven of Tesla's solar rooftop installations caught fire atop the retail giant's stores, Walmart accused Tesla of negligence and asked it to shoulder the costs of removing its solar rooftops from more than 240 stores.
  • Walmart and Tesla said today, in a joint statement, that they look forward to "a safe re-energization of our sustainable energy systems," instead.
Elon Musk reveals prototypes of the Tesla Solar Roof on October 28, 2016

Tesla has settled with Walmart after its solar rooftop installations caught fire atop seven of the retail giant's stores.

Walmart sued Tesla for breach of contract in August in a New York state court, accusing Tesla of negligence and faulty installation, and asking the company to shoulder the costs of removing their solar panels from more than 240 Walmart stores to avoid further fires.

In a joint statement, shared with CNBC by Walmart, the companies said on Tuesday:

"Walmart and Tesla are pleased to have resolved the issues raised by Walmart concerning the Tesla solar installations at Walmart stores. Safety is a top priority for each company and with the concerns being addressed, we both look forward to a safe re-energization of our sustainable energy systems."

When news of the lawsuit first emerged, Tesla shares dipped. On Tuesday, following the settlement announcement, Tesla shares were inching higher in mid-day trading.

Tesla's solar business has declined since it acquired SolarCity for $2.6 billion in 2016 -- a controversial deal to this day.

In a recent deposition as part of a shareholder lawsuit, CEO Elon Musk said that the solar business took a back seat to the company's electric car business as it tried to ramp up Model 3 production, and that he "reallocated" any employee he could from the solar business to work on the Model 3.

In that lawsuit, shareholders are suing Tesla over the SolarCity deal, alleging that the whole thing was a bailout for Musk and his relatives, and that Musk knew SolarCity was facing a liquidity crisis before he pushed the Tesla board and shareholders to do the deal.

In the third quarter of 2019, Tesla installed 43 megawatts of solar, 54% lower than the same period last year, but an improvement over the second quarter.

Of late, Tesla has been talking up the third version of its long-promised Solar Roof, a.k.a. Solarglass, which it is selling online now to customers for $100 non-refundable order fee.

Walmart sues Tesla after solar panels on stores catch fire, calls Tesla to remove them
Walmart sues Tesla after solar panels on stores catch fire