South Korea’s competition regulator has fined Mercedes-Benz the equivalent of about €6.5 million for allegedly misleading consumers about the battery suppliers used in some of its electric vehicle models.
The Korea Fair Trade Commission (KFTC) said the automaker promoted its Mercedes-Benz EQE and Mercedes-Benz EQS models as using battery cells supplied by CATL. According to the regulator, certain variants of these vehicles were instead equipped with battery cells from Farasis Energy.
The KFTC said dealership sales guidelines stated that all EQE and EQS vehicles were fitted with CATL battery cells, while information about Farasis-supplied batteries was not included in dealer manuals or marketing materials.
The investigation followed a 2024 incident in which a Mercedes EQE caught fire in an underground parking facility in the city of Incheon. The fire damaged or destroyed around 140 vehicles and led to the evacuation of residents from the building. Authorities later identified the battery cells in the vehicle involved as being supplied by Farasis Energy.
After the incident, the South Korean government required automakers operating in the country to disclose their battery suppliers. Subsequent disclosures showed that several EQE and EQS variants used Farasis cells, while others were equipped with CATL battery packs.
According to the KFTC, approximately 3,000 vehicles using Farasis battery cells were sold in South Korea between June 2023 and August 2024, generating about 281 billion won in revenue.
The regulator imposed a fine of 11.2 billion won, or roughly €6.5 million, representing about 4% of the revenue linked to the affected vehicle sales, the maximum penalty permitted under South Korean law for unfair business practices.
A representative from the KFTC told Reuters the penalty would be paid jointly by Mercedes-Benz’s German headquarters and its Korean subsidiary.
Mercedes-Benz Korea said it respected the regulator’s decision but disagreed with the ruling and planned to challenge it in court.
The company said it would pursue legal steps, including filing an administrative lawsuit, and maintained that it had provided “accurate and truthful information” to both customers and the media regarding its vehicles.
