This week, the retail giant filed litigation against Tesla alleging "gross negligence and failure to live up to industry standards" for Tesla’s SolarCity solar panels. The devices were installed on the roofs of hundreds of the retailer's stores, which resulted in several fires.
On Friday, the suit was put on hold as both companies moved to work out a resolution. Nevertheless, Einhorn — the CEO of Greenlight Capital who’s amassed bets against Tesla’s stock — used the controversy to take a shot at Musk on Twitter.
“If Tesla wants to save the human species, it should pay more attention to the safety of its own customers. You shouldn’t have to be Walmart to have your dangerous solar panels fixed,” Einhorn posted.
In another Tweet, he tagged the U.S. Consumer Product Safety Commission and called for Musk to step down, suggesting any other panels could pose a risk.
How many solar panels are still defective and could cause fires? @Tesla should
immediately notify the people who live in and work in buildings at risk. Secret
Project Titan is over the line. A recall should have happened long ago @USCPSC.
@Elonmusk should resign.
— David Einhorn (@davidein) August 23, 2019
A Tesla spokesperson declined to comment to Yahoo Finance on Einhorn’s remarks.
Einhorn is a far less frequent tweeter than Musk — a power user who frequently lands in controversy on the platform, and vents against bearish investors that short Tesla’s stock.
The hedge fund manager’s last tweet was from August 10, 2018 when he thanked Musk for the “shorts” he received in the mail.
Walmart vs Tesla on hold...for now
The latest controversy over Tesla’s solar business, however, appears far more serious than a Twitter war. Walmart alleges that Tesla breached its obligations to install, inspect, and maintain the solar panel systems.
Since the lawsuit was filed, the two companies halted the action, and have been in in discussions. On Friday, they issued a joint statement that said they were aiming to clear up “all issues and re-energizing Tesla solar installations at Walmart stores, once all parties are certain that all concerns have been addressed."
More than 240 of Walmart's stores had the Tesla installed solar panels and at least seven stores experienced fires due to those solar panel systems, legal documents allege.
According to the complaint, the fires appear to date back to August 2012 when the a Long Beach, California store had to be evacuated and merchandise was damaged as water leaked into the store.
By May 31, 2018, Walmart demanded that Tesla de-energize all the solar panel systems installed at its stores. Yet, that didn’t prevent another fire. In November 2018, a fire broke out at a store in Yuba City, California even after those panels had been disconnected in June.
Tesla’s solar panels have been in the spotlight before. According to a report by Business Insider's Linette Lopez, Tesla unveiled “Project Titan” back in 2018, an effort to quietly replace the faulty connectors for its solar panels.
Meanwhile, solar panels aren’t the only safety issue that short-seller Einhorn has called out for Tesla.
In an investor letter sent in April, Einhorn slammed the electric car company for using its customers and motorists as "guinea pigs." In that letter, Einhorn detailed a laundry list of safety concerns and then questioned why there hasn't been a recall of the electric carmaker's vehicles.
“Recently, GM, Ford and Toyota announced a consortium to establish safety rules for development, testing and deployment of autonomous vehicles,” the investor wrote. However, Tesla “was notably absent from that group and continues to use its customers and other motorists, bikers and pedestrians sharing the roads with distracted or sleeping Tesla drivers as guinea pigs.”
Another prominent short seller, Jim Chanos, has also called out the quality of Tesla’s cars, and hammered Musk’s management style.
Greenlight Capital posted returns of 17.4% through the first half of 2019, an investor letter shows.
Julia La Roche is a finance reporter at Yahoo Finance. Follow her on Twitter.