Tesla Settles $6 Million Class Action Lawsuit Over Unexpected Solar Roof Price Increases
A lead plaintiff in the class action, Matthew Amans, saw his solar roof price increase from around $72,000 in his original contract to around $146,000 per court filings.
Tesla, Inc., the famed automaker and clean energy company headed by billionaire entrepreneur Elon Musk, has agreed to a settlement in a class action lawsuit regarding sudden and unexpected price increases on their innovative Solar Roof product. The suit was brought on by thousands of customers who felt blindsided by the changes. According to a recent CNBC report, Tesla will pay just over $6 million in the settlement.
The dispute centered around the Solar Roof, a product unveiled by Tesla in 2016 that offered an alternative to traditional solar panels by integrating solar cells into roof shingles. The design was a significant departure from traditional roof-top solar panels and was touted by Musk as a product "as good or better" than the traditional model. The Solar Roof was developed alongside SolarCity, a company owned by Musk's cousin that was later absorbed into Tesla's operations. Today, the Solar Roof and Powerwall, a rechargeable home battery system, are crucial elements of the Tesla Energy portfolio.
The class action lawsuit included 8,636 customers, 6,307 of whom had canceled their orders due to the price increases. Among the remaining customers, approximately 1,600 have completed their full contracts at the original prices. The rest are either scheduled for installation or have pending contracts. One of the lead plaintiffs in the case saw their contract rise from approximately $72,000 to $146,000. Some customers were offered a free Powerwall home battery as an incentive to continue with the increased contract price.
The unexpected price surge in 2021 left many Solar Roof customers frustrated and confused. In some instances, Tesla urged customers to accept new contracts with prices more than double the original cost. This surprising hike was attributed by Musk to variations in roof complexities and increased costs, admitting that the company had made "significant mistakes."
Several Solar Roof customers shared their experiences with The Verge, recounting how they took out loans and expended both time and money on acquiring local permits and even removing trees to prepare for the installation. A wave of customer activism followed the price hike, with petitions created urging Tesla to honor the original prices. At least one customer filed a complaint with their state attorney general’s office, alleging "abandonment of contract, extortion, and deliberate misguidance and misinformation" on Tesla’s part.
The lawsuit was initially filed in May 2021. As of the beginning of 2023, Tesla has reportedly installed only 3,000 Solar Roofs in total. Given this context, the settlement can be viewed as an expensive lesson for Tesla and a cautionary tale about the potential pitfalls of pioneering new technologies. Despite this setback, Tesla continues to be a major player in the clean energy sector and is likely to remain a key influencer in shaping the future of sustainable energy solutions.
Moving forward, it's crucial that Tesla, and other companies in this rapidly evolving sector ensure clear and transparent communication with customers to avoid such legal setbacks. It also underscores the importance of precise cost analysis before pricing innovative products like the Solar Roofs. Today's customers value not just the quality and innovation of a product but also the integrity and reliability of the company behind it. It's a lesson that comes with a $6 million price tag for Tesla.
