Mercedes-Benz Fined by South Korea's KFTC for Misleading Customers on Electric Vehicle Battery Suppliers
South Korea's Korea Fair Trade Commission (KFTC) has imposed a fine of 11.2 billion won ($7.6 million) on Mercedes-Benz for allegedly misleading customers regarding the battery suppliers used in certain electric vehicle models. The KFTC found that the automaker's marketing materials and dealer sales guides inaccurately described the battery sourcing for models such as the Mercedes-Benz EQE and Mercedes-Benz EQS, which were promoted as using CATL batteries but actually used Farasis Energy battery cells.
The KFTC stated that Mercedes-Benz distributed an internal sales manual to dealers in June 2023, highlighting the advantages of CATL batteries while omitting the use of Farasis battery cells in some models. This led to dealers unknowingly promoting CATL battery technology to customers, despite having detailed information about battery suppliers from the company's German headquarters since 2021.
The investigation was initiated following a 2024 fire involving a Mercedes-Benz EQE in South Korea, which was equipped with Farasis battery cells. The incident raised concerns about consumer awareness regarding the battery supplier. As a result, the KFTC fined Mercedes-Benz 11.2 billion won for allegedly failing to provide accurate information to customers and dealers, with about 3,000 vehicles sold in South Korea between June 2023 and August 2024 using Farasis battery cells.
The fine imposed by the KFTC underscores the importance of transparency in the electric vehicle industry, particularly in communicating crucial details about battery technology to consumers. As automakers navigate the evolving landscape of EV technology and battery sourcing, maintaining transparency and accuracy in marketing materials and dealer guides is essential to building trust with customers and complying with regulatory standards.