Tesla ‘knew about the problem well before 2017,’ whistleblower says of alleged solar panel risk

A former Tesla (TSLA) quality engineer turned whistleblower says the electric car maker has known for at least four years that some of its solar panels could catch fire, but has failed to detect or fix the problem.

Reuters revealed on Monday that complaints about alleged risks made by whistleblowers are subject to an ongoing investigation by the US Securities and Exchange Commission. The agency confirmed the investigation in a letter dated September 24 to former engineer Stephen Hinks, in response to his request under the Freedom of Information Act.

“I have learned through internal documents, and third-party engineering reports, that Tesla/SolarCity was aware of this issue prior to 2017,” Hincks told Yahoo Finance Live.

Tesla acquired Solar City for $2.6 billion in 2016, in a controversial deal that led to a shareholder lawsuit. The electric car giant’s stock fell as much as 6% Monday after the Securities and Exchange Commission reports, although it trimmed its losses by the end of that day.

“Try to work internally with Tesla’

Henkes said he first learned about the problems with faulty electrical connectors in December 2020, while working for Tesla as a field quality manager. He says he was fired from the company about six months later in August 2020, after informing government regulators of his concerns.

Tesla did not respond to Yahoo Finance’s request for comment; However, the company said it has implemented a remedial plan to maintain the panels.

Hynix’s attorney, Robert Wallace, told Yahoo Finance that the repairs did not make the panels safe.

“Not done right. Not done safely. They are not using the proper tools to deal with the problem,” Wallace said. “The problem Stephen originally complained about, the reason he was fired, continues.”

Stephen Hincks, the former employee of Tesla and Toyota who complained to the SEC in 2019 that Tesla failed to properly notify shareholders and consumers of the fire hazards of its solar panel systems, is seen during an interview in San Francisco, California, U.S. December 1, 2021. Photo taken December 1, 2021. REUTERS/Nathan Frandino

Wallace says Henkes first tried to address the concerns at home.

“He has tried to work internally with Tesla to resolve the issue,” Wallace said. “And when he wasn’t satisfied, that was when he filed a complaint with the US Securities and Exchange Commission and the US Consumer Product Safety Commission, jointly, in April of 2019.”

According to Hincks, his position as field quality manager gave him insight into the alleged risks. Specifically, he points to Tesla retrofits, or conventional solar panels, installed between 2015 and late 2018, as those that pose a risk.

“It was my job to explain and/or get consensus to the suppliers who were supplying the component that we had a problem — a very big problem in this area,” Hinx said. “Not only that, my responsibility was to engineer and develop a method for processing and remanufacturing in the field, as well as to start remanufacturing lines.”

Tesla’s solar panel problems have been the subject of litigation from residential and commercial customers.

In 2019, Walmart filed a lawsuit against the company, which has since been settled, alleging 492 counts of negligence and breach of contract over panels it said caused seven warehouse fires between 2012 and 2018. Amazon joined Walmart in the allegation that one of its warehouses had been arrested. Fire due to Tesla panels.

According to Business Insider, Tesla said the connectors used in its panel assemblies are made by Amphenol Corp. (APH) “I experienced connection failures and outages at a higher rate than our standards allow,” although over the course of a year, abnormal behavior appeared in less than 1% of locations where connectors were installed. Amphenol said its conductors are not responsible for panel fires, according to the Los Angeles Times.

In addition to complaints to regulators, Henkes sued Tesla claiming it was wrongfully terminated in retaliation for his reporting. The lawsuit is now pending and is due to arbitrate in April next year.

“First and foremost, my main goal is to protect the public and protect families in their homes,” Hinx said.

Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter Tweet embed.

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