LG Energy Solution Ltd (LGES Korea) and LG Energy Solution Australia Pty Ltd (LGES Australia) (together LGES)

The Australian Competition and Consumer Commission (ACCC) has accepted a court enforceable undertaking (Undertaking) from LG Energy Solution Ltd (Korean Corporation Number 110111-7701356) and LG Energy Solution Australia Pty Ltd ACN 622 029 047 (together LGES) in relation to LG home energy storage system batteries which have a manufacturing defect and can catch fire (Affected Batteries).

At the time the undertaking was accepted, the Affected Batteries were also subject to the following voluntary recalls in Australia:

• PRA 2020/18529 notified by LGESAU in August 2020 and PRA 2022/19420 notified by SolaX Power Aus Pty Ltd (SolaX) in March 2022 (collectively the Initial Voluntary Recall); and
• PRA 2022/19550 notified by LGESAU in August 2022 (the Software Fix Recall).

Together the Initial Voluntary Recall and the Software Fix Recall (the Voluntary Recalls) include Affected Batteries with cells produced between 21 January 2016 and 30 June 2019 and involve around 18,000 Affected Batteries.

The Undertaking follows a Proposed Recall Notice (Proposed Notice) which the Assistant Treasurer issued On 5 February 2024 in respect of the Affected Batteries. A proposed notice is issued before the Assistant Treasurer issues a compulsory recall. Given the commitments LGES has now given in the Undertaking the Assistant Treasurer has decided, based the ACCC’s recommendation, not to issue a compulsory recall in respect of the Affected Batteries.

• The Undertaking accepted by the ACCC:

1. Requires LGES to remediate Affected Batteries in a manner and period aligned with what was in the Proposed Notice, being to replace or remove and refund Affected Batteries, or to install diagnostic software to address the safety risk associated with certain Affected Batteries. The Undertaking also requires LGES to tell consumers to turn Affected Batteries off until they are remediated, and to provide compensation for higher energy costs incurred as a result. 
2. Following a recent incident in a battery that had diagnostic software installed which is intended to shut batteries down before an incident caused by the underlying defect occurs, requires LGES to provide an interim remedy to consumers whose batteries have the diagnostic software installed. That remedy is a switch off direction while the cause of the incident is investigated and an offer of compensation for higher energy costs incurred during that period. The ACCC is to decide whether it is satisfied that the diagnostic software is an effective remedy, and, if not, LGES must replace or remove the batteries, and provide a refund to consumers whose batteries are removed.
3. Requires LGES to address any future incidents in (or new information regarding) the software fix cohort of Affected Batteries by allowing the ACCC to decide whether it is satisfied with LGES’s assessment that the diagnostic software is a suitable remedy, and where the ACCC is not so satisfied, LGES will replace or remove and refund the batteries. 
4. Contains commitments to undertake a more dynamic advertising campaign compared to the requirements contained in the Proposed Notice, informed by expert advice obtained by LGES.