Tesla Hit With KRW 2.85 Billion Fine in South Korea Over Alleged False Advertising

South Korea’s antitrust regulator said it would impose a KRW 2.85 billion (roughly Rs. 18 crore) fine on Tesla for failing to tell its customers about the shorter driving range of its electric vehicles (EVs) in low temperatures.

The Korea Fair Trade Commission (KFTC) said that Tesla had exaggerated the “driving ranges of its cars on a single charge, their fuel cost-effectiveness compared to gasoline vehicles as well as the performance of its Superchargers” on its official local website since August 2019 until recently.

The driving range of the US EV manufacturer’s cars plunge in cold weather by up to 50.5 percent versus how they are advertised online, the KFTC said in a statement on Tuesday.

Tesla could not be immediately reached for comment.

On its website, Tesla provides winter driving tips, such as pre-conditioning vehicles with external power sources, and using its updated Energy app to monitor energy consumption, but does not mention the loss of driving range in sub-zero temperatures.

In 2021, Citizens United for Consumer Sovereignty, a South Korean consumer group, said the driving range of most EVs drop by up to 40 percent in cold temperatures when batteries need to be heated, with Tesla suffering the most, citing data from the country’s environment ministry.

Last year, the KFTC fined German carmaker Mercedes-Benz and its Korean unit 20.2 billion won for false advertising tied to gas emissions of its diesel passenger vehicles.

On Monday, Tesla reported record production and deliveries for fourth-quarter electric vehicles, but it missed Wall Street estimates, burdened by logistics problems, slowing demand, rising interest rates and fears of recession.

The world’s most valuable automaker delivered 405,278 vehicles in the last three months of the year, compared with Wall Street expectations of 431,117 vehicles, according to Refinitiv data. The company had delivered 308,600 vehicles in the same period a year earlier.

© Thomson Reuters 2023