Rad Power Bikes Faces Battery Safety Concerns as Financial Troubles Mount
Seattle-based Rad Power Bikes, once a celebrated unicorn startup in the e-bike industry, is navigating troubled waters as the U.S. Consumer Product Safety Commission (CPSC) issued a warning urging consumers to immediately stop using certain Rad bikes due to potentially hazardous lithium-ion batteries. This safety alert comes at a particularly vulnerable time for the company, which recently disclosed its precarious financial situation that could lead to a complete shutdown by January 2025. The contrasting narratives between the regulatory body and the company highlight the challenges facing not just Rad Power Bikes, but potentially the broader e-bike industry as safety standards evolve.
According to the CPSC warning issued Monday, the batteries in question “can unexpectedly ignite and explode, posing a fire hazard to consumers, especially when the battery or the harness has been exposed to water and debris.” The agency cited at least 31 reports of fires involving these batteries, including 12 incidents that caused property damage totaling approximately $734,500. The batteries were sold both as replacements and with various Rad bike models through the company’s website, Best Buy stores, and independent bike shops. Affected models include the RadWagon 4, RadCity HS 4, RadRover High Step 5, and several others that use battery models HL-RP-S1304 or RP-1304. The CPSC stated that Rad “has refused to agree to an acceptable recall” for these Chinese-manufactured batteries, prompting the agency to take the unusual step of issuing a unilateral warning.
Rad Power Bikes has vigorously disputed the CPSC’s characterization of their batteries as “defective or unsafe.” In a comprehensive statement, the company emphasized that its batteries were tested by independent third-party labs both during routine product testing and during the CPSC investigation, confirming “compliance with the highest industry standards” including UL-2271 and UL-2849. Rad pointed out that the incident rate associated with the batteries in question is “a fraction of one percent,” though acknowledged that “even one incident is one too many.” The company also contextualized the risk by noting that all lithium-ion batteries—whether in e-bikes, laptops, or power tools—can pose fire risks if damaged, improperly charged, or exposed to extreme conditions. Rad contends that “contrary to the CPSC’s statement, mere exposure to water and debris does not create a hazard; rather, significant water exposure, as warned against in our manuals, can pose a hazard.”
What makes this situation particularly challenging for Rad Power Bikes is its timing. The company had been experiencing remarkable growth just a few years ago, raising over $300 million from investors in 2021 and achieving a valuation of $1.65 billion—unicorn status in startup terminology. The pandemic fueled demand as consumers sought alternative transportation options, and Rad grew to serve nearly 700,000 riders globally. However, recent years have brought a series of setbacks, including more than seven rounds of layoffs. Earlier this month, Rad revealed its dire financial circumstances, filing a Worker Adjustment and Retraining Notification with Washington state authorities. A company spokesperson confirmed that this filing was due to financial challenges and not related to the CPSC investigation, though the safety warning will undoubtedly complicate the company’s efforts to remain operational.
The dispute between Rad and the CPSC also reveals tensions in the approach to consumer safety. Rad maintains that it offered “multiple good-faith solutions” to address the agency’s concerns, including offering consumers an opportunity to upgrade to their newer “Rad Safe Shield” batteries at a substantial discount. However, the company claims the CPSC rejected these proposals, instead making “all-or-nothing” demands that would “force Rad to shut its doors immediately, leaving no way to support our riders or our employees.” Rad introduced the upgraded Safe Shield battery in early 2024 as part of its ongoing safety innovations but argues that developing improved technology doesn’t necessarily mean previous products were unsafe—drawing an analogy to automotive safety features like anti-lock brakes that improved upon, rather than invalidated, earlier designs.
This controversy highlights broader questions facing the rapidly growing e-bike industry about safety standards, regulatory oversight, and the balance between innovation and consumer protection. The CPSC proposed requiring UL standards for e-bikes beginning in January 2025 but has yet to formally adopt them—standards that Rad claims its products have met for years. As Rad noted in its statement, “Without the adoption of clear, common-sense standards, no electric bike manufacturer can operate with confidence.” For consumers who own the affected bikes, the CPSC recommends immediately removing the batteries and disposing of them according to local hazardous waste procedures. Meanwhile, Rad Power Bikes faces the dual challenge of addressing these safety concerns while fighting for its very survival as a company—a dramatic reversal of fortune for what was once considered a shining star in Seattle’s startup ecosystem.
