Tesla recalls 10,500 Powerwall 2 systems due to overheating, fire risk

Tesla is recalling around 10,500 units of its Powerwall 2, a backup battery for residential use, according to a U.S. Consumer Product Safety Commission disclosure out Thursday.

“The lithium-ion battery cells in certain Powerwall 2 systems can cause the unit to stop functioning during normal use, which can result in overheating and, in some cases, smoke or flame and can cause death or serious injury due to fire and burn hazards,” the CPSC recall notice said.

While Elon Musk’s electric vehicle and clean energy company blamed the issue on a “third-party battery cell defect,” it did not name the supplier.

The recall notice said Tesla previously received 22 customer reports of the Powerwall 2 overheating, including five fires resulting in “minor property damage,” but no known injuries.

Tesla’s Powerwall products are sold via its Energy division, along with giant, backup batteries that are built for utility-scale projects and use at large business facilities.

The Powerwalls work with Tesla’s solar photovoltaics, or solar rooftops, and can store electricity in a home for use at a later time, including during blackouts or during days or hours when electricity prices are higher.

In a separate notice on Tesla’s website, the company emphasized that the issue does not affect owners of newer model Powerwall systems, specifically Powerwall 3. The company website also said, “all affected units are being replaced at no cost to customers.”

Tesla’s biggest growth engine in the third quarter of 2025 came from its energy division, which sells Powerwalls. Tesla Energy saw revenue jump 44% to $3.42 billion in the third quarter, and as of the end of September, its energy segment represented about one-quarter of Tesla’s overall revenue.

Tesla shares fell by more than 7% on Thursday. Representatives for Tesla did not respond to a request for comment.