South Korea’s competition authority has fined Mercedes-Benz for misleading consumers about the battery suppliers used in some of its electric vehicles, concluding that key information was omitted from sales materials provided to dealers.
The Korea Fair Trade Commission (KFTC) said it imposed a corrective order and a fine of 11.239 billion won (about $7.6 million) on Mercedes-Benz Korea and its parent Mercedes-Benz Group AG for what it described as “unfair customer attraction practices.” The regulator also decided to refer both companies to prosecutors.
The case concerns the marketing of the Mercedes-Benz EQE and Mercedes-Benz EQS electric models. According to the KFTC, the company prepared a sales guideline—known internally as an EQ sales playbook—and distributed it to dealers in June 2023 to support vehicle sales.
The document contained key technical information, including the battery cells used in the vehicles. However, the commission said the guideline omitted the fact that several models were equipped with battery cells supplied by Farasis Energy. Instead, the materials highlighted only batteries from Contemporary Amperex Technology Co. Limited (CATL), the world’s largest EV battery manufacturer, describing their “industry-leading technology” and “No. 1 global market share.”
In reality, the battery configuration differed from the description provided to dealers. The KFTC said four of six EQE models and one of seven EQS models sold at the time were fitted with Farasis battery cells. Both the Korean subsidiary and the German headquarters were aware of this but did not disclose it in the sales guidelines.
Battery cells are a core component of electric vehicles and are directly related to performance and safety, making the identity of the supplier an important factor in consumers’ purchasing decisions, the regulator said.
Dealers relied on the guideline when explaining the vehicles to customers and were instructed to emphasize the advantages of CATL batteries if consumers asked about battery suppliers. As a result, many dealers themselves were unaware that some vehicles contained Farasis batteries.
Between June 2023 and August 2024, about 3,000 vehicles equipped with Farasis batteries were sold in South Korea, generating sales of roughly 281 billion won.
The KFTC concluded that the conduct misled consumers into believing the vehicles were superior to their actual characteristics. Because battery supplier information is closely linked to safety concerns, the regulator imposed the fine at the maximum level of 4% of relevant sales allowed under the law.