LIZ: WE NEED TO LOOK AT TESLA
SHARES.
THEY ARE GETTING SINGED IN THIS
FINAL HOUR OF TRADE.
WALMART SMACKING ELON MUSK'S
ELECTRIC EMPIRE WITH A LAWSUIT
OVER ITS CLEAN ENERGY DIVISION
FORMERLY KNOWN AS SOLAR CITY.
WALMART IS A CUSTOMER OF TESLA'S
SOLAR ROOFTOP PANELS AND SAY
THOSE PANELS ATOP SEVEN OF ITS
STORES CAUGHT FIRE, CAUSING
MILLIONS OF DOLLARS OF QUOTE,
SIGNIFICANT DAMAGE.
THIS JAB TO TESLA SHARES COMING
AS THE TECH GIANT LOOKS TO
REINVIGORATE ITS CLEAN TECH
BUSINESS, SLASHING PRICES JUST
FOUR MONTHS AGO FOR ITS PANELS
AND JUST TWO DAYS AFTER
ANNOUNCING A NEW SOLAR PANEL
RENTAL PLAN.
TESLA'S STOCK RIGHT NOW IS DOWN
2.5%.
IT STARTED DROPPING YESTERDAY
AFTER THE BELL WHEN NEWS OF THE
LAWSUIT BROKE.
YOU SEE THE NEGATIVITY SPILLING
OVER AND PILING UP EVEN RIGHT
NOW.
THE STOCK OF TESLA AT $220.08.
LET'S BRING IN TO FIND OUT THE
EFFECT ON BOTH COMPANIES, TECH
GURU AND "WALL STREET JOURNAL"
REPORTER TIM HIGGINS ALONG WITH
TESLA ANALYST AND OPPENHEIMER
MANAGING DIRECTOR COLIN RUSCH.
TESLA AND WALMART HAVE BEEN
PARTNERS FOR YEARS, IN FACT,
HUNDREDS AND HUNDREDS MORE THAN,
WHAT, 240 WALMART STORES HAVE
THESE SOLAR PANELS ON THE ROOFS
FOR A COUPLE OF YEARS NOW.
WHAT DO YOU THINK IS REALLY AT
WORK HERE?
>> WELL, FOR TESLA, IT RAISES
NEW QUESTIONS ABOUT THEIR
ABILITY TO EXECUTE.
THAT'S BEEN A BIG CONCERN FOR
THE LAST TWO OR THREE YEARS, AS
TESLA PUT ALL ITS ATTENTION ON
BRINGING OUT THE MODEL 3,
STRUGGLING TO BRING OUT THE
COMPACT CAR, MAKING IT,
SERVICING IT, DELIVERING IT, NOW
YOU THROW IN THIS SOLAR PANEL
ISSUE AND IT JUST HIGHLIGHTS ONE
OF THE BIG PROBLEMS ELON MUSK
HAS, EXECUTING.
LIZ: WELL, COLIN, LET'S GET TO
THAT.
EXECUTING THE ACQUISITION OF
SOLAR CITY IN 2016, EVERYBODY
WONDERED IT WAS A LITTLE BIT
EXPENSIVE, I THINK TESLA BOUGHT
IT FOR THE
IT FOR $2E
IT FOR $2.6 BILLION AND
EVERYBODY WAS QUESTIONING HOW
WOULD THEY ABSORB THIS DIFFERENT
BUSINESS.
YES, THERE ARE SHADES OF
SIMILARITIES HERE BUT THIS
SOMEWHAT DIFFERENT BUSINESS
WHICH WAS STILL IN ITS NASCENT
STAGES.
WHAT'S STILL GOING ON THAT IT'S
THAT CONTROVERSIAL?
>> WE DIDN'T LIKE THE
ACQUISITION WHEN IT HAPPENED BUT
THEY MINIMIZED THIS BUSINESS IN
DRAMATIC WAYS SINCE THEY
ACQUIRED IT AND ALL THESE
SYSTEMS WERE PUT UP BETWEEN 2010
AND 2016.
THEY HAVE BEEN GOING THROUGH
LOOKS LIKE AN EXTENSIVE PROCESS
TRYING TO MITIGATE THIS.
I'M NOT SURE WHY IT'S ESCALATED
TO THIS LEVEL OF LITIGATION AND
THEY COULDN'T FIND A SOLUTION.
IT DOESN'T SEEM LIKE THE ISSUES
ARE PARTICULARLY COMPLICATED.
I'M JUST NOT SURE WHY IT HASN'T
ESCALATED UP TO TESLA.
IF WE LOOK AT THIS ALL IN, WE
ARE ESTIMATING ABOUT 100
MEGAWATTS WORTH OF SYSTEMS THAT
ARE AT RISK HERE.
TO FULLY REPLACE ALL THOSE WOULD
COST ABOUT $150 MILLION.
IT'S NOT A HUGE NUMBER, WE
THINK, THAT WOULD IMPACT TESLA
BUT IT IS A HASSLE AND CERTAINLY
A HEADLINE HERE THAT'S NOT NICE.
LIZ: YEAH.
IT'S NOT REALLY WHAT TESLA NEEDS
OR ANY COMPANY NEEDS, BUT TIM,
YOU LOOK AT THAT GREEN SOLAR
CITY, THOSE LITTLE TRUCKS THAT
RAN AROUND INSTALLING SOLAR,
THEN YOU SEE THIS, AND THOSE
SOLAR PANELS ON TOP OF THE ROOFS
DEFINITELY TRASHED AND TORCHED,
IT JUST BRINGS TO NOTE THAT
CALIFORNIA RECENTLY BECAME THE
VERY FIRST STATE TO OFFICIALLY
MANDATE SOLAR ON HOMES.
THESE ARE NEW HOMES.
IT WILL TAKE EFFECT FOR THOSE
HOMES BUILT 2020 OR LATER, BUT
ELON MUSK RECENTLY ANNOUNCED A
STRING OF TWEETS THAT CUSTOMERS
CAN NOW RENT TESLA'S RESIDENTIAL
SOLAR PANELS.
ARE THEY GOING TO SEE THESE
PICTURES OF, YOU KNOW, THE
AFTERMATH OF FIRES ON THE ROOF
OF WALMART AND THINK WHY WOULD I
CHOOSE THOSE?
>> THAT'S THE THREAT AND THE
RISK HERE.
THIS MIGHT NOT HIT TESLA'S
POCKETBOOK BUT THE REPUTATIONAL
RISK IS QUITE SEVERE,
POTENTIALLY, IF CUSTOMERS THINK
THESE THINGS ARE DANGEROUS.
WE HAVEN'T HEARD FROM TESLA YET.
THEY HAVEN'T PUSHED BACK BUT THE
CONCERN IS THIS WILL BE ANOTHER
EXAMPLE THAT RAISES DOUBTS IN
THE CONSUMERS' MINDS.
LIZ: DOES IT ANNOY YOU THAT AT
THE MOMENT, WE HAVEN'T REALLY
GOTTEN OFFICIAL COMMENT FROM
TESLA ABOUT THIS LAWSUIT WHICH I
CAN HOLD IN MY HAND RIGHT NOW,
IT IS RATHER HEFTY, AND A LOT OF
IT IS REDACTED.
NOTE THAT.
I HAVE BEEN LOOKING AT SOME OF
THIS AND WALMART IS REALLY,
REALLY UNHAPPY.
THEY DID FILE THIS IN THE STATE
OF NEW YORK FOR THE COMMERCIAL
DIVISION, AND ELON, THE CEO, IS
TWEETING RIGHT NOW I BELIEVE
ABOUT NUKING MARS.
DO WE HAVE THAT TWEET?
I'M NOT KIDDING.
YEAH.
NUKE MARS.
THAT WAS THE LAST HE TWEETED ON
THE 16th OF AUGUST.
WE ARE WAITING FOR SOME TYPE OF
COMMENT.
HAVE YOU HEARD ANYTHING?
>> WE HAVEN'T.
HONESTLY, THESE SORTS OF THING
TYPICALLY TAKE TIME FOR A
COMPANY TO RESPOND TO IT.
THERE IS OBVIOUSLY A CONFLICT
HERE, THEY HAVE BEEN TRYING
NEGOTIATE BEHIND THE SCENES.
I'M NOT SURE OF ALL WHAT'S GOING
ON HERE.
THE ONE THING I DO WANT TO NOTE
IS IT'S EXTREMELY UNUSUAL FOR
THESE SORTS OF FIRES TO HAPPEN,
SO THERE HAS BEEN SOME SORT OF
[ INAUDIBLE ] IN TERMS OF
INSULATION AND MAINTENANCE HERE.
THE SOLAR INDUSTRY HAS BEEN
HIGHLY SAFETY CONSCIOUS GIVEN
ITS NASCENT STAGES AND AT THIS
POINT IT'S BECOME THE CHEAPEST
SOURCE OF ENERGY ON ROOFTOPS IN
A DISTRIBUTED WAY IN ABOUT 50%
OF THE COUNTRY.
THERE IS GOING TO BE SIGNIFICANT
GROWTH FOR SOLAR AND IT'S KIND
OF A SHAME TESLA IS MINIMIZING
THIS BUSINESS BECAUSE IT IS A
REAL MATERIAL OPPORTUNITY FOR
THEM.
LIZ: COLIN, TIM, THANK YOU.