Tesla founder and CEO Elon Musk was just named Time magazine’s Person of the Year. Still, Tesla also recently made the news when the SEC announced it was investigating potential solar panel system defects manufactured by the company. Despite evidence of fires caused by defective electrical connectors, Tesla bought the troubled SolarCity (owned by Musk’s cousins) for $2.6 billion. This issue was initially brought to the attention of the U.S. securities regulator by a whistleblower complaint, which claims that the company failed to properly notify shareholders and the public about fire risks surrounding Tesla’s solar panel system for several years.
In the SEC complaint, the whistleblower said Tesla and SolarCity, which it acquired in 2016, did not disclose its “liability and exposure to property damage, risk of injury of users, fire etc. to shareholders” prior to and after the acquisition. This follows another ongoing probe involving the company’s driver assistant systems and an investigation regarding drivers able to play video games on the vehicles’ control panels while driving.
A former employee is whistleblower
Former employee Steven Henkes, a former field quality manager, filed the whistleblower complaint in 2019. He recently sent a request to the SEC about the Tesla probe, which he is entitled to do under the Freedom of Information Act. The agency acknowledged that it was conducting the investigation, but it declined to provide its records. Tesla fired Henkes in 2020. He subsequently filed a lawsuit claiming it was retaliation for raising safety concerns. He also filed a complaint with the U.S. Consumer Product Safety Commission.
There have been several lawsuits against Tesla over the solar panel systems. Walmart filed a lawsuit in 2019, claiming that roof panel systems at seven stores caused fires. Tesla denied the accusation, yet the two sides settled out of court. Several residential customers and their insurers have also sued Telsa and Amphenol (a parts manufacturer).
More to come
The SEC probe is ongoing, and Henkes appears poised to continue to press his claim. Watch this space to find out how these issues will be resolved. Considering that Tesla is now the world’s most valuable company, with the world’s richest man as the company’s majority owner, the solar panel is not likely to get swept under the rug.