Investors know Greenlight Capital’s (GLRE) David Einhorn to be a big Tesla (TSLA) bear, and Einhorn has disparaged Tesla and Elon Musk several times. Today, he tweeted, “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.”
In another tweet, Einhorn even called for Musk to step down. He wrote, “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.”
Walmart sues Tesla over solar roof fires
These tweets came in response to Tesla’s latest fiasco with solar panel fires on Walmart (WMT) roofs. Walmart is suing Tesla as of August 20, alleging that seven solar panels caught fire. Walmart also asked Tesla to remove solar panels from more than 240 of its US stores. This issue came up days after Elon Musk announced plans to relaunch Tesla Solar. With a new pricing model, customers can rent a solar system at a flat monthly rate with no installation costs. However, the removal of the solar panels and restoration of the roof would cost customers $1,500.
Yesterday, Tesla and Walmart issued a joint statement saying they’re looking at “re-energizing Tesla solar installations at Walmart stores, once all parties are certain that all concerns have been addressed.”
Another concern for Tesla came to light when Business Insider reported today that, through “Project Titan,” Tesla was trying to replace faulty parts in some rooftop solar panels in the summer of 2018. According to Business Insider, this stealth program “quarantined” affected parts to be either reworked or scrapped.
David Einhorn’s short thesis on Tesla
In GLRE’s second-quarter investor letter, David Einhorn highlighted five significant winners for Greenlight Capital, which included shorting Tesla (TSLA), gold, Adient, General Motors, and AerCap. Year-to-date, Tesla stock has fallen 33.2%, leading to gains for Einhorn’s short position in the company.
Einhorn also weighed in on Tesla during the Sohn Conference in May 2019. He bashed Elon Musk for his predictions and promises about Tesla, most of which didn’t come true. As CNBC reported, Einhorn said, “That’s a lot of horse—t.”
Previously, in GLRE’s investor letter, Einhorn had chided Tesla, saying, “The wheels are falling off — literally.” This comment came in response to several suspension problems in Tesla cars, which led to accidents. Along with the company’s safety concerns, Einhorn is also worried about operating performance.
Baillie Gifford echoes David Einhorn: No need for Musk to be Tesla CEO
Elon Musk has faced criticism from several quarters lately. Yesterday, Tesla’s biggest shareholder outside of the company, Baillie Gifford’s James Anderson, did an interview with Manager Magazin—a German magazine. Livemint quoted Anderson saying he “does not think Elon needs to be CEO.” Check out Why Elon Musk Doesn’t Need to be Tesla’s CEO for more on this perspective.
But Musk still has supporters who are invested in him and in Tesla because of his vision and where it could take the company. Ron Baron, billionaire investor and long-term Tesla bull, is one example. During a recent interview with CNBC, Baron said he remains bullish on Tesla despite some of Musk’s “self-inflicted wounds.” See Why Ron Baron Remains a Firm Long-Term Tesla Bull.
US automakers tank on China’s retaliatory tariffs
Beyond the solar panel controversy, US automakers including Tesla are also grappling with the US-China trade war. Today, China announced retaliatory tariffs on $75 billion in US products, including reinstating duties on autos. This news hit automakers hard. At 12:15 PM ET, Tesla’s stock was trading down 4.0%. General Motors, Ford, and Fiat Chrysler were down 2.8%, 2.9%, and 2.0%, respectively. The broader markets were also trading in the red with the S&P 500 down 1.7%.
Among US automakers, Tesla and Ford stand to lose significantly if these retaliatory tariffs come into play. Tesla currently imports vehicles from the US to sell in China. However, it’s building a Gigafactory in China that should help Tesla avoid some of these tariffs—despite David Einhorn’s bearishness.