Tesla Recalls 10,500 Powerwall Home Batteries for Safety Inspection

Tesla is recalling about 10,500 Powerwall 2 home battery units after reports of overheating that led to fires and property damage. The recall affects Tesla's backup battery systems that store electricity for homes, particularly during power outages or peak pricing periods.

The Consumer Product Safety Commission announced Thursday that lithium-ion battery cells in some Powerwall 2 systems can cause units to stop working during normal use. This malfunction can lead to overheating and, in some cases, smoke or flames that pose serious fire and burn risks.

Tesla blamed the problem on "a defect in battery cells from an external supplier" but didn't name the vendor. The company received 22 customer reports of Powerwall 2 overheating, including five fires that caused minor property damage. No injuries have been reported.

**What this means for Tesla's energy business**

The recall comes at a critical time for Tesla's energy division, which has become a major growth driver. Tesla Energy saw revenue jump 44% to $3.42 billion in the third quarter of 2024, representing about a quarter of Tesla's total revenue by September's end.

Powerwall systems work alongside Tesla's solar panels to store electricity for later use. Homeowners can tap into stored power during outages or when electricity rates spike during peak hours.

**The fix and affected models**

Tesla confirmed on its website that the issue doesn't affect newer Powerwall 3 systems. The company is replacing all affected units at no cost to customers.

But here's the thing - this recall highlights the challenges facing the home energy storage market as it scales up. Tesla has positioned itself as a pioneer in residential battery systems, but quality control issues with third-party suppliers can quickly damage consumer confidence in what's still a relatively new technology for most homeowners.

The recall also shows how Tesla's expansion beyond electric vehicles into energy storage brings new regulatory scrutiny and safety responsibilities that the company must navigate carefully.