Tesla Recalls 10,500 Powerwall 2 Home Battery Systems Due to Overheating & Fire Hazard | Free Replacements Offered

Tesla Recalls 10,500 Powerwall 2 Home Battery Systems Over Fire Hazard

Tesla, the electric vehicle and clean energy giant led by Elon Musk, has initiated a significant recall of approximately 10,500 Powerwall 2 home backup battery systems across the United States. The urgent action stems from a concerning risk of overheating, potential burns, and even fires associated with the units.

Understanding the Defect and Risk

The U.S. Consumer Product Safety Commission (CPSC), in conjunction with Tesla, disclosed that the root cause of the hazard is a "third-party battery cell defect." This flaw can lead to the lithium-ion battery cells malfunctioning during normal operation, resulting in excessive heat generation, and in severe cases, smoke or flames. The CPSC warning highlights the potential for serious injury or even death due to fire and burn hazards.

Tesla's Response and Customer Safety

Responding proactively, Tesla has committed to replacing all affected Powerwall 2 units for U.S. customers at no additional cost. It's important to note that this recall specifically targets Powerwall 2 systems, with newer models, particularly Powerwall 3, confirmed by Tesla as unaffected by this particular issue.

Incidents and Investigations

Prior to the official recall, Tesla had received 22 customer reports detailing instances of Powerwall 2 overheating. Among these, five reports escalated to actual fires, causing minor property damage. Fortunately, no injuries have been reported in connection with these incidents to date.

Powerwall's Role in Tesla Energy

Tesla's Powerwall systems are a key component of its Energy division, which also offers large-scale backup batteries for utility and commercial applications. These residential Powerwalls are designed to integrate seamlessly with Tesla's solar panels or solar rooftops, storing electricity for later use, such as during power outages or periods of high electricity costs.

Market Impact

The timing of this recall comes as Tesla's energy segment demonstrated robust growth. In the third quarter, the energy division's revenue surged by 44% to $3.42 billion, accounting for roughly one-quarter of Tesla's total revenue. Despite this strong performance, news of the recall led to a more than 7% drop in Tesla's shares on Thursday.