The South Korea Fair Trade Commission (KFTC) will impose a fine of KRW2.85bn (USD2.2m) on Tesla [TSLA:US] for alleged violation of advertising laws, as reported by Reuters on January 3. According to a KFTC statement, Tesla had exaggerated the driving range, charging speed, and fuel cost savings of its electric vehicles (EVs) on its official local website since August 2019 until recently. The KFTC also noted that the driving range of Tesla vehicles on a single charge decreased by up to 50.5% in cold weather compared to the company’s advertised range. In addition, the KFTC may impose an additional penalty of KRW1m (USD782) on Tesla for failing to provide customers with sufficient information regarding its cancellation policy.

KFTC’s probe into Tesla started in February 2022 when the US EV maker changed the advertisement on its Korean-language website. This was not the first time Tesla face such charges. In 2021, Citizens United for Consumer Sovereignty, a South Korean consumer group, found that the driving range of most EVs drops by up to 40% in cold temperatures when batteries need to be heated, with Tesla cars being particularly affected. However, the loss in performance can be partially due to the extra power used to heat the car for the driver and passengers in cold weather. In February 2022, the KFTC also fined German carmaker Mercedes-Benz [DAI:GR] and its Korean unit KRW20.2bn (USD16.9m) for false advertising related to gas emissions of its diesel passenger vehicles.

Sources:

https://www.reuters.com/markets/commodities/south-korea-fines-tesla-22-mln-exaggerating-driving-range-evs-2023-01-03/

https://www.bloomberg.com/news/articles/2023-01-03/tesla-fined-2-2-million-in-korea-for-alleged-false-advertising?leadSource=uverify%20wall

https://sg.finance.yahoo.com/news/south-korea-fines-tesla-2-125708643.html

https://www.reuters.com/business/autos-transportation/skorea-fines-mercedes-169-mln-over-emission-rules-breach-2022-02-07/