Tesla Inc. (TSLA  ) is preparing to implement software fixes for millions of its vehicles in China, marking this as the largest recall the company has ever initiated in the market. China's market regulator reported on Friday that Tesla will recall nearly 2.98 million China-made and imported Model 3, Model Y, Model S, and Model X vehicles, starting September 25. This recall is in response to concerns that emergency door release handles may be difficult to identify, which could hinder escape or rescue efforts following a severe crash and electrical system failure. The solution includes warning labels and an over-the-air (OTA) update that lowers windows after a collision.

Besides this, Tesla is also recalling 2.74 million China-made Model 3 and Model Y vehicles for an Over-The-Air (OTA) software update designed to enhance driver-attention monitoring while assisted steering and other driver-assistance functions are in use. This action aims to minimize the risk of collisions if drivers do not react promptly.

Tesla Model Y Tops China Sales

This news comes as Tesla's Model Y managed to reclaim the title of China's best-selling vehicle in June. Tesla's Model Y sold 38,654 units in China in June, making it the country's best-selling vehicle across all powertrain types, including gasoline, EV and plug-in hybrid models, according to Yiche data.

Notably, this is not the first time Tesla has had to recall vehicles in China. In December 2024, the company recalled 77,650 Model 3 and Y vehicles in China due to concerns about the tire pressure monitoring system.

Earlier this month, Reuters reported that Tesla plans to extend reduced production at its Shanghai factory into January, citing an internal schedule. The plant is expected to operate for 17 days from Jan. 3-19, before halting EV production from Jan. 20-31 for an extended Chinese New Year break.

Furthermore, in May, Tesla also had to recall over 218,000 vehicles in the US, including Model S, 3, X, and Y, due to an issue with the rearview camera.