Tesla Recalls Select Powerwall 2 Home Batteries in Australia

PVTIME – Tesla has announced a recall of certain Powerwall 2 home energy storage systems in Australia, in response to statements made by the country’s Competition and Consumer Commission (ACCC) and Tesla itself. The recall, which was issued on 16 September 2025, covers units produced between November 2020 and June 2022. There are concerns that the lithium-ion battery cells, which are supplied by a third-party provider, pose a fire risk.

These manufacturing defects could cause the affected Powerwall 2 units to overheat, emit smoke or catch fire. To date, there have been multiple reports of minor property damage in Australia linked to the problem, though no injuries or fatalities have been recorded. While most impacted batteries have had their risk reduced through remote discharging, the ACCC has noted that overheating remains a potential hazard that could lead to more serious incidents, including damage to homes or personal harm.

This recall is strictly limited to the Australian market; no similar actions have been announced in regions such as the United States or Europe, and the exact number of affected units has not been disclosed. Notably, the faulty cells are the same 2170-type lithium-ion batteries used in Tesla’s Model 3 vehicles. Frequent charging and discharging cycles, such as those involved in virtual power plant load balancing, have been identified as a factor that may accelerate their degradation.

In response to these concerns, Tesla has remotely discharged most of the affected Powerwall 2 systems to a safe energy level and sent notifications to users via the Tesla app. The company has committed to providing free replacements for all affected units, offering either a new Powerwall 2 or an upgrade to a Powerwall 3, depending on stock availability. Tesla will cover all installation costs. Tesla has also confirmed that it will assess and provide compensation for individual cases of actual loss, including reduced earnings from energy storage activities.

Tesla’s official announcement outlines the scope of the recall and the replacement process, as well as user responsibilities. It advises affected customers to check their unit’s status and arrange servicing via the Tesla app. The ACCC has emphasised that all replacements must be completed by 31 December 2025 and has provided details on risk levels and the characteristics of the affected products, as well as information on avenues for users seeking recourse.

The Powerwall 2 uses 2170-type nickel-cobalt-manganese lithium-ion batteries, which offer high energy density but carry a significant risk of thermal runaway. In contrast, the Powerwall 3, launched in 2023, employs lithium iron phosphate batteries, which provide substantially improved safety performance. The use of cells from an unnamed third-party supplier in the affected units has highlighted gaps in Tesla’s supplier oversight during periods of rapid expansion. This mirrors quality control issues seen in previous recalls, such as those related to Cybertruck roof panel detachment.

Australian regulators have requested that Tesla submit a corrective action report, and are considering incorporating battery safety standards into national legislation. This could influence quality control requirements across the global energy storage sector.