The heated steering wheel in my 2019 Toyota RAV4 Hybrid experienced a significant overheating incident that resulted in smoke, bubbling, and damage to the steering wheel's leather covering. Approximately 10 minutes after activating the heated steering wheel function, smoke began coming from the steering wheel. The material beneath the leather covering appeared to become excessively hot and began visibly bubbling and expanding. As the overheating continued, the leather covering ruptured, creating a hole in the steering wheel. Prior to this incident, the steering wheel was intact, with no punctures, holes, or visible damage. The hole developed during the overheating incident as the material beneath the leather bubbled and the covering ruptured. This occurred during normal use of the vehicle's factory-installed heated steering wheel feature. The sudden appearance of smoke and excessive heat created a serious safety concern, including the potential for burns, fire, driver distraction, and loss of vehicle control. The vehicle was subsequently taken to a Toyota dealership for inspection. The exact cause of the overheating has not been determined. I am reporting this incident because a heated steering wheel should not produce smoke, overheat to the point of damaging its exterior covering, or create a potential fire hazard during normal operation.