S.Korea fines Tesla $2.2 mn for alleged false advertising

South Korea’s antitrust body has decided to impose a fine of 2.9 billion won ($2.2 million) on Tesla Inc., the world’s top electric vehicle maker, for allegedly overstating the driving range of its EVs in the country.

The Fair Trade Commission (FTC) said on Tuesday Tesla exaggerated the mileage of its EVs in its advertisements, which had been posted on its Korean website since August 2019, by showing the maximum range at temperatures of 20-30 degrees Celsius.

The US EV maker had advertised that the Tesla Model 3 Long Range could drive more than 446.1 kilometers, or 277.2 miles, on a single charge. But the mileage of the electric sedan dropped to 220.7 kilometers when running downtown in cold weather of minus 6.7 degrees Celsius, the FTC said.

The regulator also said Tesla used expressions of “more than” hundreds of kilometers in the ads instead of “up to” hundreds of miles, which is used in the US.

CHARGING SPEED

The FTC said Tesla provided false information on its EVs’ charging speed as well.

The watchdog said the company advertised that its EVs could be charged enough to run hundreds of kilometers in 15 or 30 minutes without mentioning the types of its Superchargers and test conditions.

The regulator said the advertisement was based on the test results of its V3 Supercharger, which was not available in August 2019 in South Korea. Such performance was also possible only under optimized conditions -- not under ordinary circumstances -- with high charging efficiency, the FTC said.

Tesla also violated regulations by estimating the amount of fuel cost reduction based on the assumption of a lower-than-average charging price without further explanation, the FTC said.

The EV maker has recently changed its advertisements to reflect the FTC’s judgments, the regulator said.

Separately, the regulator decided to slap an additional fine of 1 million won on Tesla for failing to provide terms and conditions on the initial page of its online mall. It also required correcting some allegedly unfair business practices such as charging 100,000 won for each order, which is not refundable when the order is canceled before the delivery of the EV.

Tesla was the No. 1 EV seller in the first half of 2020 in South Korea with a market share of 43.3%, according to the FTC. The country’s top automaker Hyundai Motor Co. made up 29.8% and its affiliate Kia Corp. accounted for 14.1%.

Write to So-Hyeon Kim at alpha@hankyung.com
Jongwoo Cheon edited this article.