South Korea Fines Mercedes Over Misleading EV Battery Info
South Korea fined Mercedes 7.6 million dollars for misleading buyers about EV battery brands. The regulator also referred the automaker to state prosecutors.
The antitrust regulator in South Korea has issued a fine of 11.2 billion won ($7.61 million) against Mercedes-Benz Group AG for providing misleading information about the battery suppliers for its electric vehicle (EV) lineup. The Korea Fair Trade Commission (FTC) determined that the automaker deceived consumers by suggesting certain high-end models were equipped with superior components. This fine represents the maximum legal penalty for such unfair practices, calculated at approximately 4% of the related sales revenue. According to the investigation, the company distributed sales guidelines to its dealer network implying that all EQE and EQS electric models used battery cells produced by Contemporary Amperex Technology Co., Limited. Headquartered in China, this supplier is currently the largest EV battery manufacturer in the world. However, the regulator found that many of these vehicles were actually fitted with cells from Farasis Energy (Gan Zhou) Co., Ltd., a company that does not rank among the top global suppliers. The discrepancy came to light following an August 2024 fire involving a Mercedes EV in an Incheon parking lot, which was found to contain Farasis batteries. The FTC noted that approximately 3,000 vehicles with these batteries were sold between mid-2023 and mid-2024, generating sales of roughly 281 billion won. The regulator described the lack of transparency as a serious breach of consumer trust. > "Some Mercedes EV models, however, were fitted with battery cells supplied by Chinas Farasis Energy, information that was omitted from the internal sales guide and concealed from dealers and consumers, the FTC said in a statement." In addition to the financial penalty, the regulator intends to refer both the local unit and the corporate headquarters in Germany to prosecutors. This enforcement action occurs as global automakers navigate complex supply chains and currency volatility, including shifts in the EUR/USD exchange rate that impact international operations.
