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Photo = Fair Trade Commission |
[Alpha Biz= Kim Jisun] South Korea’s Fair Trade Commission (FTC) has imposed a fine of more than KRW 11.2 billion ($8.4 million) on Mercedes-Benz for allegedly misleading consumers about the battery supplier used in its electric vehicles.
The FTC said on March 10 that it will issue a corrective order and a fine of KRW 11.239 billion against Mercedes-Benz for violating the Fair Trade Act and other regulations. The agency also decided to refer both Mercedes-Benz Korea and the company’s German headquarters to prosecutors for further investigation.
According to the regulator, Mercedes-Benz created vehicle sales guidelines that suggested its electric vehicles were equipped with battery cells from CATL, the world’s largest EV battery manufacturer, even though many EQE and EQS models were actually fitted with battery cells produced by Farasis Energy.
The FTC said the company concealed the use of Farasis batteries and instead portrayed the vehicles as if all models used CATL cells.
The case marks the first time South Korea has penalized an automaker for deceiving consumers by omitting or concealing information about EV battery cell manufacturers, the regulator said.
The investigation began after a Mercedes-Benz EQE caught fire in the underground parking lot of an apartment complex in Cheongna, Incheon, in August 2024. Authorities later discovered that the vehicle was equipped with a Farasis battery, contrary to earlier information suggesting the use of CATL cells.
According to the FTC, Mercedes-Benz had prepared sales guidelines for affiliated dealers to use during vehicle sales. The materials contained no mention of Farasis battery cells and instead highlighted only the strengths of CATL batteries, including references such as “the reason Mercedes-Benz chose CATL,” “industry-leading technology,” and “No. 1 global market share.”
Dealers were also instructed to emphasize the advantages of CATL batteries when responding to customer inquiries about battery suppliers.
Between June 8, 2023, when Mercedes-Benz Korea distributed the sales guidelines to dealers, and Aug. 13, 2024, when the company began disclosing battery suppliers by model, approximately 3,000 vehicles equipped with Farasis battery cells were sold, generating about KRW 281 billion in sales, according to the FTC.
The regulator said it imposed a fine equivalent to 4% of the related sales revenue, applying the maximum penalty rate in consideration of the issue’s direct connection to public safety and consumer protection.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
