Tesla, the company that has long positioned itself at the forefront of the green energy revolution, is now facing a serious challenge to its image — and consumer safety.
Roughly 10,500 of its Powerwall 2 home battery systems are being recalled due to a potentially dangerous overheating defect that poses a real risk of fires and property damage in residential homes.
The U.S. Consumer Product Safety Commission (CPSC) announced the recall Thursday, citing lithium-ion battery cells inside the Powerwall 2 units that can overheat during normal use. In certain instances, this has already led to smoke, fire, and minor property damage, according to the agency.
Tesla has confirmed 22 overheating reports, five of which resulted in actual fires. While no injuries have been reported, the potential for serious harm is significant — especially considering these battery systems are designed to be installed in garages, basements, and utility rooms across thousands of American homes.
Tesla attributes the issue to a “third-party battery cell defect” but notably has not revealed the name of the supplier.
That silence leaves a gaping hole in accountability and raises questions about the supply chain transparency of one of the world’s most closely watched tech companies. For customers, the concern is not just about a product malfunction, but a fire hazard sitting just a few feet away from their families.
The Powerwall 2 is a central piece of Tesla’s energy ecosystem. It stores energy collected from solar panels and allows homeowners to either save on electricity bills or keep their homes running during grid outages. The system was marketed as a cleaner, smarter alternative to reliance on aging utility infrastructure. That promise is now being tested in a very real, very combustible way.
Tesla has stated that the Powerwall 3 — its next-generation unit — is not affected by the recall. The company has also promised to replace all affected Powerwall 2 units free of charge. Still, the recall arrives at an inconvenient time.
Tesla’s Energy division, buoyed by growing demand for solar and storage solutions, recently posted a 44% revenue surge in Q3 2025, reaching $3.42 billion. That means energy products now make up nearly a quarter of Tesla’s overall revenue.
