Seoul: South Korea's antitrust regulator has imposed a fine of 11.2 billion won (US$7.58 million) on Mercedes-Benz for misleading consumers about the battery suppliers used in some of its electric vehicle (EV) models. The Korea Fair Trade Commission (FTC) targeted Mercedes-Benz Group AG and its South Korean unit, Mercedes-Benz Korea Ltd., following concerns over EV safety that intensified after a major fire incident involving one of the company's EV models.
According to Yonhap News Agency, the FTC discovered that Mercedes-Benz had distributed sales guidelines suggesting that its EQE and EQS EV models were equipped with battery cells from China's Contemporary Amperex Technology Co. Ltd. (CATL), the world's largest battery manufacturer. However, it was revealed that some vehicles were actually fitted with cells from China's smaller supplier, Farasis Energy Inc., whose batteries had been recalled in China in 2021, prior to the EQE model's launch.
The FTC concluded that the discrepancy was not disclosed in the internal sales guide and was concealed from both dealers and consumers. This decision comes after heightened concerns over EV battery suppliers, particularly following an incident in August 2024, when a Mercedes-Benz EQE caught fire, damaging over 100 vehicles and destroying an underground apartment parking garage in Incheon, west of Seoul.
The regulator noted that approximately 3,000 vehicles containing Farasis battery cells were sold between June 2023 and August 2024, generating around 281 billion won in sales. The 11.2 billion-won fine, representing about 4 percent of the related sales, is the maximum penalty permitted under South Korean law for such unfair practices, according to the FTC.
In addition to the fine, the FTC has referred both Mercedes-Benz's headquarters in Germany and its local unit to prosecutors. Following the ruling, Mercedes-Benz Korea stated that it respects the FTC's announcement but disagrees with the decision. The company emphasized that it has provided accurate and appropriate information to both the media and customers and plans to seek legal procedures, including an administrative lawsuit.