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SEC Probes Tesla Over Solar Panel Defects Case
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SEC Probes Tesla Over Solar Panel Defects Case

The U.S. Securities regulator has reportedly opened an investigation into Tesla Inc. (TSLA) over a defective solar panel case, according to Reuters. A whistleblower had filed a case in 2019 stating that the company failed to inform its shareholders and the public about possible fire risks due to defects in the solar panel system.

Following the news, shares fell as low as 6.3% before closing the day almost flat at $1,009.01 on December 6.

Whistleblower Claims

The whistleblower, Steven Henkes was a former Toyota Motor quality division manager, and joined SolarCity in 2016 as a quality engineer. Soon after SolarCity was acquired by Tesla in 2016, Henkes became aware of the fire problem associated with the solar panels. The company manufactures and sells solar generation systems to residential, commercial, and industrial customers.

Back in 2019, Henkes had informed the SEC that he had told Tesla to close its solar panels over fire and safety issues, and inform customers about the same. However, Tesla failed to pay heed to his requests and Henkes officially filed a complaint with the SEC.

Earlier, even Walmart, Inc. (WMT) had filed a case against Tesla stating that its roof solar system had caught fire in seven stores.Similarly, several residential customers had also complained about the same issue.

Freedom of Information Act

In September 2021, Henkes requested to seek information on his pending complaint under the Freedom of Information Act. The SEC denied the request and replied, “We have confirmed with Division of Enforcement staff that the investigation from which you seek records is still active and ongoing.” However, the SEC did say that the probe does not indicate that any wrongdoing has been done.

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Analysts’ Take

Overall, the TSLA stock has a Hold consensus rating based on 12 Buys, 6 Holds, and 7 Sells. The average Tesla price target of $938.52 implies 7% downside potential to current levels. Shares have gained 57.2% over the past year.

Website Traffic

TipRanks’ Website Traffic tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into TSLA’s performance.

In October, Tesla website traffic recorded a 13.17% year-over-year decline in monthly visits. However, year-to-date website traffic growth increased by 1.72% compared to the same period last year.

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