A proposed class action alleges Tesla has “refus[ed]” to fulfill its contractual obligations and instead unilaterally demanded massive price increases as a condition of installing its solar roof panel energy systems.
The 14-page breach-of-contract case alleges the electric vehicle maker—who entered into the solar panel business around 2016—impermissibly increased the price of its Solar Roof system that was quoted to the plaintiffs, Pennsylvania residents who the case says were asked to sign a “new agreement” before Tesla would move forward with installation.
“On or about April 23, 2021, Defendant unilaterally increased the price to be charged to Plaintiffs for the System and advised Plaintiffs that they now owe $78,352.66 instead of the previously bargained-for and agreed-to amount of $46,084.80,” the lawsuit alleges.
According to the lawsuit, the price increase amounts to an attempt by Tesla to unilaterally change the terms of a fully executed contract on “improper, false and pretextual bases.” The complaint alleges Tesla has engaged in similar conduct, i.e., refusing to perform as agreed under its contracts, with solar panel customers throughout the country.
“Mistakes were made,” suit says, citing Musk
The suit cites an April 26, 2021 earnings call statement from CEO Elon Musk who said that Tesla “did find…some significant mistakes” with regard to its solar system’s pricing and that the company could not “go and just lose a massive amount of money.” The lawsuit points to these statements as evidence that Tesla, notwithstanding its binding contracts to provide solar roof systems, is “breaching, anticipatorily or otherwise, its agreement by imposing price increases of 2-3 times the agreed-upon prices.”
The case, filed in Pennsylvania’s Eastern District, centers on Tesla’s “Solar Roof” product, which is made up of solar shingles that closely resemble ordinary roof shingles and can be installed with the company’s Powerwall energy storage system. Per the suit, the plaintiffs were interested in Tesla’s solar system because of its environmentally friendly nature and because the consumers were prohibited by homeowners’ association rules from installing traditional solar panels on their home.
Change of plans?
According to the lawsuit, Tesla prepared a design and price quote for the plaintiffs around late 2019 for the solar roof shingles and energy storage system, but the consumers, at the time, decided not to proceed with the contract. In 2020, after the plaintiffs bought a Tesla vehicle, they decided to ask for an updated proposed solar contract, which again included a specific price quote for installation, the case says. The contract executed by the plaintiffs in September 2020 stated an agreed-upon price of $46,919.20 for the solar roof system, and the consumers thereafter refinanced their mortgage to utilize equity to pay for the installation work stipulated in the contract, the lawsuit states.
In March 2021, the plaintiffs received from Tesla an email that stated, in pertinent part, that their solar roof would now feature “steel tiles capable of fitting complex roof angles with no aesthetic compromise on non-solar portions of the roof,” the case relays. On April 15, the plaintiffs were informed that Tesla had increased the price of its Solar Roof, and to expect an email within two weeks when their “new agreement” was ready, according to the complaint. Shortly thereafter, the plaintiffs received notice that they would now owe more than $78,000 for the solar system, about $32,000 more than they originally agreed upon.
“By expressly stating that Plaintiffs needed to sign a ‘new agreement’ before Defendant would move forward, Defendant made clear that Tesla would not perform as agreed under the Contract,” the lawsuit contends.
Who’s included in the class action?
The lawsuit looks to represent all persons with whom Tesla entered into a contract for the purchase and/or installation of a Solar Roof and/or Powerwall energy storage system at a residence in Pennsylvania and who were notified by Tesla prior to installation that they would be required to pay an increased price.
What if I don’t live in Pennsylvania?
Right now, the lawsuit is only looking to cover those with residences in Pennsylvania. It’s possible, however, that additional lawsuits could be filed seeking coverage for those in other states or perhaps nationwide – so stay tuned to this page for updates.
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