Tesla has issued an Australia-wide product recall for its Powerwall 2 home battery energy storage solution due to a "defective battery cell" supplied by a third-party supplier .

The Australian Competition and Consumer Commission (ACCC) confirmed that Tesla has remotely disconnected most of the affected devices. Reports indicate that the affected battery cells have smoked or caught fire, causing some property damage.

The issue is limited to a specific group of Powerwall 2 users and does not affect Powerwall 3. No injuries have been reported.

While most devices have been remotely disconnected, consumers are still advised to confirm their Powerwall 2 systems are online and check the Tesla app to see if their devices are affected.

Affected equipment will be replaced free of charge, and Tesla will consider compensation "on a case-by-case basis" for energy savings lost due to outages in the Powerwall 2 system.

The ACCC confirmed that the affected Powerwall 2 products were sold between November 1, 2020, and June 30, 2022. Tesla said it would "prioritize affected customers" and would coordinate directly with customers and installers to arrange the removal and installation of the equipment.

Which supplier of Tesla has the problem?

Tesla's Powerwall product line was first launched in 2015 and currently has three different models: Powerwall 2, Powerwall+ and the latest Powerwall 3. Last year, Tesla CEO Elon Musk noted that its energy storage business was "growing like wildfire," thanks in part to the Powerwall series.

The recall document did not specify the supplier of the problematic battery cells, only mentioning "a batch of lithium-ion battery cells from a third-party supplier."

This suggests that while Tesla worked with multiple battery cell suppliers during this period, it had identified issues with a specific batch of products from one supplier.

Tesla Powerwall 2 products produced between November 2020 and June 2022 used lithium-ion battery cells from multiple suppliers, with Contemporary Amperex Technology (CATL) being one of the main suppliers during that period.

Since 2020, CATL has been Tesla's battery supplier, primarily providing battery cells for Tesla's electric vehicles, including the Model 3 and Model Y. During this period, Tesla's partnership with CATL has continued to deepen, coinciding with the production period of the affected Powerwall 2 products.

Although CATL is the primary supplier, Panasonic has also maintained a partnership with Tesla during this period. The Powerwall 2 uses lithium nickel manganese cobalt (NMC) battery cells developed in collaboration with Panasonic.

LG Energy Solution was also one of Tesla's battery suppliers during this period. The South Korean company provides battery cells for a variety of Tesla products, with deliveries beginning around 2019-2020. LG Energy Solution also experienced a series of recalls in Australia involving its own-brand home battery systems sold between 2017 and 2018, with recalls expected between 2021 and 2024.

However, since Tesla has not issued a public statement, it is not clear which supplier the problematic battery cells come from.