Two weeks ago, Walmart (NYSE:WMT) sued Tesla (NASDAQ:TSLA).
The complaint, filed in New York state court, accuses Elon Musk’s company of “widespread, systemic negligence” that caused Tesla’s solar panel systems to spark fires at “no fewer than seven Walmart stores.”
The lawsuit may not inflict much direct economic harm on Tesla, but the company’s reputation could suffer a serious blow from the fact that its giant corporate customers are litigating and griping.
Shortly after Walmart filed suit, for example, Amazon (NASDAQ:AMZN) complained that a blaze on the roof of one of its Southern California warehouses also involved a Tesla solar panel system. Tesla called it “an isolated incident.”
Unfortunately for Tesla, these “isolated incidents” are piling up like kindling around a funeral pyre.
Tesla’s Trouble Could Benefit SunPower
According to the Better Business Bureau, Tesla takes the grand prize for most customer complaints per solar megawatt installed. During the last year, the Bureau received an average of 20 customer complaints per 10 megawatts of solar capacity installed by Tesla.
That number of complaints was more than seven times the number of complaints about SunPower (NASDAQ:SPWR).
Not surprisingly, as customer lawsuits and complaints accumulate around Tesla, its growth trajectory is atrophying. Even prior to the Walmart lawsuit, Tesla’s solar operations had been losing market share and gaining negative press. In fact, Tesla’s solar installations have been trending lower for several years, even though the total volume of U.S. solar installations has been growing.
Meanwhile, the company’s more well-known electric vehicle business is also facing a series of setbacks and skeptics. Tesla stock is down 35.1% over the past two years.
Against this backdrop of dwindling installations, the Walmart lawsuit is unwelcome news for Tesla. Walmart has been a major customer. It has leased roof space at 240 stores to Tesla to install and operate solar systems.
Clearly, Tesla will not be signing up a 241st Walmart rooftop any time soon. On the contrary, Walmart is already signing new installation agreements with alternative solar system providers … including SunPower.
I recommended SunPower stock to my subscribers in the July issue of my newsletter, Fry’s Investment Report — and those shares have already made peak gains of better than 30%.
It is probably no coincidence that Walmart struck a new installation contract with SPWR stock last year, soon after Tesla’s solar panels began detonating on the retailer’s rooftops. Specifically, Walmart contracted with SunPower to install solar systems at 21 sites in Illinois — 19 stores and two distribution centers.
Contract “wins” like these are a big part of the reason why SunPower’s solar deployments are ramping up so significantly. SunPower stock is already the No. 1 provider of solar systems to U.S. commercial and industrial customers like Walmart and Target (NYSE:TGT).
In other words, Tesla’s troubles in the solar industry can be nothing but good news for SPWR stock – and the Fry’s Investment Report portfolio.
Along with Tesla there are a lot of companies out there jumping on the solar bandwagon, and there is clearly a lot of investing potential here.
The International Energy Agency (IEA) anticipates global spending on solar power to total $4 trillion over the next two decades — or about $180 billion per year.
But it’s all about finding the right companies that offer significant long-term potential.
That’s why I’ve released an “all solar” edition of Fry’s Investment Report.
In it, besides SPWR stock, I share other recommendations to get investors in on this technology’s profit ground floor. And I’ve packed it full of other research laying out my case for solar’s blindingly bright future.
To learn more, I strongly suggest you go here to find out how to join Fry’s Investment Report.
Eric Fry is a 30-year international finance expert, former hedge fund manager, and InvestorPlace’s resident expert on global investment trends. He founded his own investment management firm and served as a partner several others. One of the few analysts who predicted the last big market crash, in 2007-’08, Eric showed his readers how to profit off of companies that eventually went bust. His readers could have walked away with gains like 1,415% on Countrywide Financial, 4,408% on Fannie Mae, and even 6,425% on Freddie Mac. With Fry’s Investment Report, Eric’s goal is to track the world’s biggest macroeconomic and geopolitical events – and help investors make big gains from those emerging opportunities. Click here to learn more.
