Mercedes-Benz Slapped With Hefty $7.6 Million Fine in South Korea

Mercedes-Benz has been slapped with a hefty $7.61 million (approx. ₹700 crore) fine for misrepresenting the battery suppliers in its electric vehicles. The country’s anti-trust regulator — Fair Trade Commission (FTC) — has imposed this hefty fine on the German marque following an investigation of its foul marketing practices.

According to Reuters, the FTC’s investigation found out that Mercedes-Benz promoted its EQE and ​EQS models as using premium cells from CATL — the world’s largest ​EV battery maker— while concealing that some vehicles instead carried Farasis ⁠Energy batteries. This information was found absent from dealer guides and marketing material.

The FTC launched an investigation after it found battery cells in a Mercedes EV involved in an August 2024 fire at an underground parking lot in Incheon were made by Farasis. During this incident, more than 100 vehicles parked nearby were destroyed, while residents had to be evacuated from the building.The investigation further reveals that about 3,000 vehicles from Mercedes-Benz containing ​Farasis battery cells were ​sold between June ⁠2023 and August 2024. 

In June 2023, Mercedes-Benz Korea circulated an internal EV sales manual to its dealers. The guide offered detailed explanations of the brand’s electric vehicle lineup and highlighted the advantages of CATL battery technology. However, it did not disclose that some models were fitted with battery packs supplied by Farasis Energy.

Dealers were therefore unaware that certain vehicles, including the EQS and EQE, were not equipped with CATL batteries. As a result, many promoted these EVs under the assumption that they featured CATL technology, unintentionally passing on inaccurate information to customers.

However, the interesting thing to note is that this omission by Mercedes-Benz wasn’t unintentional. Mercedes-Benz Korea had, in fact, received detailed information about battery suppliers from its German headquarters as early as May 2021. Despite being aware of this, the Korean arm of the German brand omitted any reference to Farasis Energy battery packs in the dealer guides.

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FTC has revealed that the above fine will be paid jointly by Mercedes' German headquarters and its Korean unit. The regulator said it would also refer both Mercedes’ headquarters in Germany and its Korean unit to prosecutors, stating that the two entities were directly or indirectly involved in creating and distributing the sales guidelines.

On the other hand, Mercedes-Benz Korea acknowledged the regulator's ruling but "firmly disagreed" with the commission's final decision. This case comes at a time when transparency related to EV batteries has been extensively scrutinised in South Korea.