Tesla 'knew about the problem well before 2017,' whistleblower says on alleged solar panel fire risk

A former Tesla employee and his lawyer join Yahoo Finance Live to discuss allegations that the electric vehicle company acted recklessly related to solar panels.

Video Transcript

ALEXIS CHRISTOFOROUS: Welcome back, everybody. Tesla is facing an SEC probe over what it told investors about its solar panels. Yahoo Finance's Alexis Keenan here now with some very special guests. Alexis.

ALEXIS KEENAN: Hi, Alexis. Thank you. I have with us here Robert Wallace, who is an attorney in California on behalf of Steven Henkes. He's also joining us. He's a former Tesla field quality manager who blew the whistle on Tesla and filed complaints with regulators over its solar panels. So welcome to both of you. Thanks for being here.

ROBERT WALLACE: You're welcome.

STEVEN HENKES: Thank you for having us.

ALEXIS KEENAN: All right, Robert, I want to start with you. This all started with Steven's complaint to authorities back in 2019, while he was still working at Tesla as a field quality manager, as I understand it. And that's, I think, a type of engineer, but you can correct me if I'm wrong. And he later was fired over that. So how did that incident get us to where we are today, learning that the SEC is looking into Tesla solar panels and that we're learning that through you, not through Tesla?

ROBERT WALLACE: Yeah, well, it really began with Mr. Henkes' employment at Tesla. And he was originally hired at Circuit City in 2016 before the merger and the acquisition. After the merger and acquisition was concluded, it became apparent that Mr. Henkes' job duties were expanded. And he became aware of the solar panel issue and the safety issues connected with it at that time. So it was actually going back to 2017. He tried to work internally with Tesla to get the problem resolved. And when he was not satisfied, that's when he filed the SEC and the Consumer Product Safety Commission complaint jointly in April of 2019. That's the background.

ALEXIS KEENAN: And so, Steven, I want to go to you next. Now we've known for some time that Walmart and others have sued over these solar panel fires. Also the US Consumer Product Safety Commission looking into these reports based on your complaint. But when do you say is the earliest time that Tesla or SolarCity knew that these panels could cause harm? And does your job-- did your job at that time give you any sort of insight as to why that could be?

STEVEN HENKES: You make a very good point. First and foremost, I just want to explain that this is a public safety issue. And everyone has a right to a safe and-- safe domicile and a place to congregate, including to go shopping in. So, first and foremost, my main intent is to protect the public and protect families in their homes. So, as Robert explained, in 2017 in December, I became aware of these particular-- of the particular issue and the scope of the issue. And I was aware of-- made aware through internal documents, third party engineering reports that Tesla/SolarCity knew about this problem well before 2017.

ALEXIS KEENAN: OK, and can you be more specific? What exactly caused you to reach the conclusion that these solar panels were dangerous?

STEVEN HENKES: It was my job to explain and/or gain consensus to the suppliers who were supplying the component that we had a problem, a very large problem in the field. Not only that, my responsibility was to engineer and develop the method for remediation and remanufacturing in the field and also starting up remanufacturing lines.

ALEXIS KEENAN: Now, Steven, Tesla has different types of solar panels. So was this one type in particular, was this a rooftop panel, ground-based, or carport solar?

STEVEN HENKES: Yes, families know, and also, as the businesses know who experienced thermal events, this is particularly, like what you're showing there on the screen, retrofit solar traditional solar panels that were installed from 2015 all the way through late 2018.

ALEXIS KEENAN: OK, and also, we've reached out to Tesla for comment on this issue. And we've not heard back yet. But the company has said in the past that it's maintenance that was needed in order to rectify any alleged problem here. So why or why isn't maintenance enough in this case, as you see it?

STEVEN HENKES: Alexis, this is a corporate culture who puts reputation over safety, over public safety. I want to be very clear about that.

ALEXIS KEENAN: OK.

STEVEN HENKES: That's why.

ALEXIS KEENAN: Also--

STEVEN HENKES: That's the short answer.

ROBERT WALLACE: Let me add as well that another component of Mr. Henkes' current lawsuit, which I'm representing him in, is that the remediation efforts that you're referring to are not sufficient. They're not being done properly. They're not being done safely. They're not using the proper tools to take care of the problem. So the problem, as Steven originally complained about, about which he was fired for, is ongoing.

STEVEN HENKES: This is correct.

ALEXIS KEENAN: Well, we're going to have to-- thanks, guys. We're going to have to leave it there. I just want to mention that the SEC has also said that just because it has an inquiry doesn't mean that they have come to any conclusion on illegal activity or any wrongdoing by either company. I'm going to send it back to Alexis now. Robert and Steven, thank you so much for being with us.

STEVEN HENKES: Thank you, Ale--

ALEXIS CHRISTOFOROUS: All right, thanks, gentlemen, for that. Thank you, Alexis Keenan, for bringing that to us.