Posted on August 22, 2019 |
by Johnna Crider
August 22, 2019 by Johnna Crider
Get some coffee because it will be a long, detailed read. In fact, you may just want to move your coffee pot to your living room (or wherever you are reading this) and enjoy.
However, going back in time, we can actually see that the Walmart trial against Tesla is a pretty defensive move – not an insult that many seem to think at first reading (naturally). In fact, Walmart just seems to be petty. Let me explain.
On August 20, 2019, Tesla filed a notice of breach and seeking treatment at the New York City office. That was before Walmart decided to sue Tesla. The document is dated July 27, 2019, but was officially submitted a month later.
"I am writing to track the breach and I want to know for sure that Tesla has been sent to Walmart," the document said. Read on for a quick breakdown of important document items.
Courtesy of the SEIA / Solar Means Business report image
“Material breaches of Walmart agreements”
Tesla installed, maintained and operated 248 solar energy systems on the roofs of 248 Walmart stores. These systems are under contract (solar energy and service agreement or something like that).
Each system has a contract. Some may have specific conditions that differ, but each has the same common point: Tesla supplies and maintains the systems, and Walmart pays to use the equipment or energy it generates.
Walmart breached this contract, according to Tesla. 244 systems are offline because Walmart failed to comply with the agreement, according to Tesla. Tesla says he has tried to settle delays, unjustified demands and changing Walmart positions. In other words, the consequence is that Walmart apologizes and extracts this.
"It is neither necessary nor realistic for us to attempt to document all of Walmart's misconduct, misconduct or bad faith in one letter. Nevertheless, we will summarize this course of conduct to ensure that Walmart is informed of the allegations Tesla has against it, "the company writes. Here is a summary of more information from Tesla's detailed letter:
1. "Solar Photovoltaic Roofing Systems"
Tesla began operating the systems around September 2010, and in 7 years, the number they reach 248 systems. Each system underwent local inspections and received a work permit. Between 2010 and March 2018, they collectively produce over 600,000 MWh of electricity.
2. "Without a contractual obligation, Tesla shelters Walmart's worries after unrelated heat events in the spring of 2018."
In March and May 2018 Beavercreek, Ohio and Indio, California, Walmart After these two fires, Walmart requested that Tesla deactivate the other systems at their sites, although none had a history of thermal events and posed no threat or risk – whether from thermal events or something else.
Walmart has no right to require that these intact systems be vented. Even so, Tesla has gone out of its way to comply with the demands of a valuable customer. Tesla also agreed to inspect each system to make sure all problems were resolved at its own expense. Tesla and its investors are paid based on the energy generated by the systems.
3. "Walmart causes delays by renewing the first verification protocol"
This means that Walmart delays the verification process – repeatedly. An example was the two parties that agreed to the protocol, but Walmart did not commit to Tesla on the verification or the reports.
Walmart also hired two consultants and insisted that the minutes be revised with its input. It took months until he negotiated a new protocol and finally reached an agreement in December 2018.
4. "Walmart caused delays by imposing non-contractual terms on re-energization by not providing feedback on inspection reports, not paying his consultant and not following him. "
In December, the two agreed that Tesla would complete the checks using the new protocol. Next month, Tesla reviewed the reports with the consultants and all agreed that all criteria were met for each site. Then Tesla asked to recharge. But Walmart instead invited Tesla to his headquarters to discuss the re-energization and plan to sustain the progress made by the countries in the previous year.
This means that Walmart changed his mind about something else – modifying an agreement he had just negotiated and wanted something else: for Tesla to pay for the damages to the three sites, attorney fees that were made, and consultant fees.
If Tesla did not pay these fees, Walmart would say no to Tesla's request to reload the sites, including sites that did not have any problems.
Basically: Walmart asked third parties to join and review the plans. They agreed, all parties agreed, and when Tesla wanted to re-energize the systems, Walmart said, "Unless you give us money."
5. Walmart's Delayed and New Demand for Re-energizing on 248 systems waiting for additional Root Cause analysis for 2 (or maybe 4) systems.
Walmart insists that none of the 248 systems can be reconnected until Tesla provides the root cause. This means Tesla now has to investigate why the two panels caught fire and until they know what started it, Walmart will keep all systems offline.
This particular paragraph details back and forth constantly, with Walmart constantly changing its focus, making more requests, suddenly looking happy, and then suddenly again dissatisfied while making other new random requests.
Tesla leaned back to Walmart. Tesla went as many as nine to ensure that each of the 248 roof systems was safe. Tesla also went out of his way to make sure Walmart was satisfied.
Tesla suffers by doing this. That made a cost and a loss, but he was okay with it because he wanted to make sure Walmart was satisfied. The only thing Tesla did not do was give up his contract rights. Tesla did its part, but Walmart refused to re-energize the systems.
Walmart is still trying to delay this and now her high profile claim is really just one of those delays. Tesla writes:
"The only obstacles to reloading the 30 sites that have already been inspected are: (a) Walmart's insistence that it first have to send its consultant to verify the reports until it takes concrete steps and (b) the repeated practice of Walmart to impose unjustified non-contractual terms and rebates on recharging. Tesla is sure that if Walmart does indeed inspect the sites inspected, he will find that his concerns are alleviated. But Walmart refuses to even look. Walmart cannot claim a violation on sites it has never checked, agrees to a screening protocol as a cure, and then continues to claim a violation because it refuses to confirm that its requests for treatment have been granted. The only real obstacle to Walmart getting what it is entitled to under the contract is Walmart itself. ”
In other words, Walmart plays games – games that cost Tesla and its investors a lot of money.